On a summer evening at the Electric Love Festival in Salzburg, amid pounding basslines and light shows, the conversation turned to one of the quieter but more urgent issues in modern finance: the persistence of crypto fraud. The setting might have been unconventional, but for Daniel Winkelhammer, founder of 21bitcoin, it was fitting. His company has built its reputation on bringing Bitcoin to broader audiences, often far beyond the traditional confines of banking halls and corporate conferences.
Winkelhammer’s own path mirrors the arc of the technology itself—part youthful experimentation, part disillusionment with corporate bureaucracy, and part fascination with the radical possibilities of digital money. After studying informatics and business informatics in Salzburg and Vienna, he began his career at Allianz, one of Europe’s largest insurers, before moving into consultancy for regional heavyweights such as Porsche Bank and Red Bull.
But his entrepreneurial energy was drawn elsewhere. First exposed to Bitcoin in 2011, he became captivated by its dual appeal: the elegant engineering of blockchain technology and the promise of a decentralized financial system. By 2020, amid the upheaval of the pandemic, he co-founded 21bitcoin to make the cryptocurrency simpler and safer for everyday investors.
Fraud is a structural challenge
Safety, however, remains elusive in an ecosystem that has attracted not only pioneers and early adopters but also scammers. Winkelhammer does not shy away from acknowledging the darker side of the industry. Fraud, he explains, has become a structural challenge, shaped by two distinctive features of cryptocurrencies: the irreversibility of transactions and the speed with which funds can move across borders. Once Bitcoin is transferred to a fraudulent address, there is no recourse to reverse the payment. For criminals operating outside the European Union, often from jurisdictions with weak enforcement cooperation, the chances of being pursued are slim.
The types of fraud are depressingly familiar. Impersonations of well-known exchanges, fake investment schemes promising outsized returns, and long-term manipulation of victims through forged relationships. At 21bitcoin, which serves more than 80,000 clients across 30 countries, the stories are numerous: investors persuaded to wire five- and six-figure sums despite repeated warnings from both the platform and their own banks. In one extreme case, a client ignored multiple alerts, even taking out a loan to continue transferring funds into what was little more than a sophisticated illusion of wealth.
Education is key
The psychology behind such cases, Winkelhammer argues, is as important as the technical vulnerabilities. Many newcomers arrive with the belief that cryptocurrencies offer a path to quick fortunes, a perception fueled by headlines about early Bitcoin adopters who became millionaires. This sense of possibility leaves them exposed to narratives carefully spun by fraudsters. Fake trading platforms show fabricated gains, online operators build rapport over weeks or months, and victims, lacking technical or financial literacy, are unable to distinguish between a legitimate interface and a counterfeit.
For Winkelhammer and his team, countering fraud has become a full-time endeavor. Eight staff members are dedicated solely to customer support and transaction monitoring. Suspicious log-ins from unusual locations are flagged. Direct phone calls are made when abnormal behavior is detected. New wallet addresses are subject to waiting periods before funds can move. Yet the company admits its powers are limited: like banks handing out cash, it cannot ultimately dictate how customers choose to spend or invest. What it can do is educate—offering guidance at critical decision points, embedding warnings into the user interface, and ensuring clients understand the risks before pressing “send.”
Instments in infrastructure security
The company also invests heavily in infrastructure security. Customer funds are held entirely in cold storage, segregated from corporate accounts, with insurance coverage provided by the established custodian BitGo. No single employee, not even the CEO, has unilateral authority to move assets. For institutional clients, whom 21bitcoin plans to serve once it secures its MiCA license later this year, even stricter protocols are envisioned: co-signing requirements among directors, whitelist-only transfers, and mandatory holding periods for new accounts.
Fraud may be a persistent feature of finance—traditional banking scams are hardly new—but Winkelhammer argues that the stakes are higher in crypto because of its finality and the ease of global transfers. At the same time, he insists that Bitcoin itself is not inherently conducive to crime. The blockchain, after all, is a public ledger, fully transparent and traceable. Once an identity is linked to an address, every transaction is exposed. Far from being the perfect tool for criminals, he suggests, Bitcoin is a risky medium for illicit finance compared with privacy-focused alternatives.
Why 21bitcoin focuses exclusively on Bitcoin
His company’s decision to focus exclusively on Bitcoin is both ideological and pragmatic. While rivals chase revenues by listing thousands of volatile “altcoins,” 21bitcoin positions itself as a specialist: offering long-term investors a single, credible digital asset. Bitcoin, Winkelhammer says, is not just the most resilient of cryptocurrencies but also the clearest regulatory case. Even the U.S. Securities and Exchange Commission, aggressive in its pursuit of crypto firms, has consistently avoided challenging Bitcoin’s legitimacy.
The mission to expand access, however, extends beyond regulatory compliance and cold storage protocols. At the Electric Love Festival, 21bitcoin brought branded shuttles, a podcast lounge, and teams roaming the grounds to speak with festivalgoers. The goal was simple: to make Bitcoin visible, approachable, and less intimidating. The company’s message is that adoption must be coupled with education. Fraud will not disappear through regulations alone; it requires awareness, vigilance, and the humility to seek advice before moving funds.
For Winkelhammer, the lesson for investors is straightforward, though not easy: know what you are holding, be prepared for volatility, and resist the urge to panic during downturns. “There will be times when prices fall,” he warns, “but if you are educated and have a long-term vision, you can turn those moments to your advantage.”
In an industry where fortunes rise and fall on hype and speculation, that long-term orientation may be the most radical message of all.
Bitcoin, Fiat & Rock’n’Roll Website
Bitcoin, Fiat & Rock’n’Roll Telegram Channel
Relai*: Buy Bitcoin with Relai – you can do a one-time purchase or savings plan: Click here. Use the referral code „ROCK“ to reduce transaction fees by 0.1% while supporting Bitcoin, Fiat & Rock’n’Roll.
Value4Value Podcast Streaming: Support our podcast by listening to our episodes on the Fountain Podcast App. This way, if you wish, you can support us „Value4Value“ while listening to the podcast. You can find us on the Fountain Podcast App here: Click here
Disclaimer: The content of this podcast reflects the private opinions of the hosts, serves exclusively for general information purposes and does not constitute investment advice. Always remember: Do your own research – inform yourself before making any investment decisions, such as buying Bitcoin. First try to understand what Bitcoin is and how to store it. This podcast does not provide financial advice. Note that the co-hosts might be invested in crypto assets. Read more on our website: Click here
All links marked with „*“ are affiliate links. If you use these links for purchase, the podcast receives a small share of the revenue without any additional costs to you. On the contrary, affiliate links often include discount promotions, so you can even save money. We would appreciate it if you use these links to support us. Thank you very much!