What is Crowdfunding and What do Practitioners Need to Know About it?

What is Crowdfunding?

According to Wikipedia, crowdfunding is “the practice of funding a project or venture by raising money from a large number of people”.  Crowdfunding platforms, which are essentially online registries or websites are used as a way to raise funds.

A Popular Way to Raise Funds

Crowdfunding has been gaining a lot of attention in the media lately. It’s popularity has especially grown since the onset of the COVID-19 pandemic. Crowdfunding become a common way for businesses, groups, and individuals to raise money.

The Pros and Cons

Perhaps one of the biggest benefits of crowdfunding is it gives the person or business running the campaign more access to people, and therefore more access to potential money. Organizers of the campaign can use funds that they raised for whatever they choose. For example, funds can be used to  support business ventures, charitable causes, personal expenses, and so on.

One of down sides to crowdfunding platforms is that the funds can also be used to support criminal behaviour.  Terrorist financing, money laundering and fraud can all be facilitated through crowdfunding platforms. Although, studies shows that most crowdfunding ventures are legitimate, donation-based crowdfunding campaigns tend to be a popular target for fraudulent campaigns.

Recent Example of Crowdfunding Scams

Like other scams, fake crowdfunding campaigns also aim to exploit the emotions of people in an attempt to solicit money from them. In April 2018, a Saskatchewan man created a GoFundMe campaign after members of a junior hockey team were tragically killed in a bus crash. The man claimed to be raising the money to support victims, but the money was actually being used for his own personal benefit. The man was able to raise just under $4,000 before the campaign was shut down and he was arrested.

Three individuals in New Jersey teamed up and started a GoFundMe campaign claiming to support a homeless veteran. They raised over $402,000.00. Most of the money was used to support a couple’s luxury trips and personal expenses, and not the homeless veteran. These are just two examples of how fraudsters have used crowdfunding platforms to facilitate fraud.

The Type of Information You Can Find

Crowdfunding platforms are a valuable resource when it comes to investigations. The information that can be obtained from them, if captured properly, can be admitted as valuable evidence. Even though each platform is a bit different, most of them have a built-in search engine, allowing users to find information such as campaign and organizer names, how much money a campaign raised, the number of supporters in a campaign, etc.

Accordingly, OSINT practitioners should be familiar with the different ways in which crowdfunding platforms can be exploited, and should know how to retrieve information from the various platforms. Having access to this information will ensure you can complete your investigation effectively.

Are you an analyst or investigator interested in learning more about crowdfunding platforms? Our Level II OSINT course covers this topic and more. Visit our website to learn about our training options.