It has just come to our attention that some rogue users are exchanging BAT tips using Brave Browser.
According to chat logs that Crypto.BI has had access to, BAT tip exchange groups have been set up in both Telegram and WhatsApp.
Before you join such a group be warned that this is illegal activity and both WhatsApp + Telegram can be easily monitored by fellow group members or LE agents who join, for example.
tl;dr; Because the Brave wallet is deposit-only and users want to withdraw their free BAT grants.
And here’s the longer explanation:
Brave sends free token grants to users as a marketing campaign. Users receive $BAT in their Brave wallets and are then able to tip publishers they like.
The Brave wallet is deposit-only. BAT sent there cannot be withdrawn (for the time being).
So the only way to “withdraw” BAT from the Brave wallet is to tip websites you enjoy. That’s where the idea for the fraud begins.
Some users tip their own websites. But this is easy for Brave to detect using simple statistics.
But if users who receive grants collude with website publishers, then they can triangulate grants and tips in a way that makes it difficult for Brave do identify the tip exchange network.
This same kind of fraud has been perpetrated against all ad networks, most notably Adsense.
If BAT has a U$ dollar value, which it obviously does, and Brave is a company established in the USA, then users agree to abide by the laws of the USA when they use the Browser (and when they tip each other using BAT).
Even more so when the only way to tip BAT cryptocurrency is using the Brave Browser.
Therefore when a user engages in tip exchanges, there is no plausible deniability, it’s deliberate.
There are several documented cases listed at the end of this article, but let’s quickly discuss what happens when you join a tip exchange group.
Brave, the company, is sponsoring the initial effort to promote Brave Browser and the BAT cryptocurrency.
This involves large sums of money that are given away to selected users so they can tip websites. The idea is to engage website owners and draw their interest in becoming Brave publishers.
When you join a BAT tip exchange group, you are basically joining an embezzlement operation.
Brave trusts you with some BAT in order to tip good publishers. When you withhold those funds and use them to tip a exchange group partner with the promise to send you a commission, you are embezzling BAT funds what were entrusted to you.
Do not join BAT tip exchange groups, unless you want to receive a Cease and Desist order or worse.
Such exchanges may be hard to identify in the short term but in the long run the patterns become clearer and using simple statistical methods Brave auditors can easily find outlier behavior from specific group of people. You can be sued years from now!
Brave is an awesome project which promises to revolutionize online advertising.
It’s up to us to help maintain a healthy community by not joining BAT tip exchange groups or any such operation whose sole purpose is to harm the overal project.
The Brave wallet will be fully functional in a future release, so you’ll be able to withdraw BAT normally. There’s no sense in being clever now and risking a large financial penalty, or even criminal charges, just to withdraw BAT.
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