New York, NY- Manhattan’s diamond district is a single chaotic block on West 47th Street, between 5th and 6th avenues. It’s usually crowded with people in groups, smoking and talking under their breath.
Men in designer jackets often ask, “buying or selling?” as they try to usher pedestrians into shops that sell glittering jewels for small fortunes.
Mike Shim has worked on this block for 15 years. Recently, a customer stole a large value of watches from his shop, by paying with fraudulent crypto currency, he said. Cryptocurrency is a digital currency designed to be exchanged through a decentralized computer network. The technology has been marred by fraud with high-profile cases, such as the trial of Sam Bankman-Fried.
“I got burned,” Shim said, ripping down a sticker that read “We Accept Bitcoin” from his store window. Crypto fraud cost U.S. businesses $2.57 billion in 2022, as attempts to regulate the industry have floundered.
The customer who pulled off the scam against Shim said he was from Dubai. He came in wearing a $60,000 watch, Shim said, shopping for other luxury timepieces.
Nothing was suspicious; the customer even haggled about the price. “If you negotiate, you seem legit,” Shim said.
When they finally settled on a watch and a price, the customer asked if he could pay in USBT, referring to an Ethereum token, a type of cryptocurrency that is pegged to the U.S. dollar’s value. “No problem,” said Shim. “We use crypto all day.”
That would be the last such transaction Shim ever accepted. The customer went through the motions of transferring the money to the store’s crypto wallet. Shim carefully confirmed the transfer with his employee. Then he handed over the two Rolexes, three high-end watches.
After the customer left, Shim got a call from his staffer saying the currency was fake. “It looked like USBT,” Shim said. “It was actually BUSBT,” a completely worthless type of token.
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