Exit scam

From Wikipedia, the free encyclopedia
Jump to navigation Jump to search

An exit scam is a confidence trick where an established business stops shipping orders while continuing to receive payment for new orders. If the entity had a good reputation, then it can take some time before it is widely recognized that orders are not shipping, and the entity can then make off with the money paid for unshipped orders.[1] Customers that trusted the business don't realize that no orders are being fulfilled until the business has already disappeared.

Individual vendors often reach a point of reputation maturity whereby they have sold sufficient product to have accumulated both significant reputation and escrowed funds, that many may choose to exit with those funds rather than compete at the higher-volume higher-priced matured product level.[2]

Exit scams can be a tempting alternative to a non-fraudulent shutdown of illegal operations if the operation was going to shut down anyway for other reasons. If an illegal entity thrives by selling drugs, for example, it is at constant risk of being shut down by the authorities, whereas if the operators perform an exit scam there are much better prospects for the perpetrators to both keep their profits and avoid eventual prosecution. Furthermore, since the cheated buyers are themselves knowingly participating in illegal activities it is not usually a viable option for them to notify law enforcement.[1] The examples mentioned in news articles are online sellers, where the buyer does not know the identity or physical location of the scammer and therefore has little recourse.


The online black market Evolution is cited as the biggest exit scam yet as of 2016. The administrators apparently made off with $12 million in bitcoin, which was held in escrow on the marketplace.[3] The WSM (Wall Street Markets) exit scam of 2019 had $142 million worth of cryptocurrencies stolen, just before the site was seized by the authorities.[4]


  1. ^ a b "The 'Exit Scam' Is the Darknet's Perfect Crime". Motherboard.
  2. ^ Janetos, Nick (January 2017). "Reputation Dynamics in a Market for Illicit Drugs" (PDF): 18. Retrieved 2 February 2017.
  3. ^ "Evolution Downfall: Insider 'Exit Scam' Blamed For Massive Drug Bazaar's Sudden Disappearance". International Business Times.
  4. ^ https://www.zdnet.com/article/law-enforcement-seizes-dark-web-market-after-moderator-leaks-backend-credentials/