Crypto’s rising value likely to bring new wave of scams
With the value of cryptocurrencies going to the roof, you can expect several attempts to get defrauded if you even show the slightest interest in the topic or not.
Since most cybercriminals lack creativity and are notoriously lazy, we expect to see only slight variations of old tricks. So, we figured if we showed you some old examples, you would know what to expect and hopefully that will assist you in avoiding them. And avoiding them is in everyone’s best interest—the Federal Bureau of Investigation (FBI) reported estimated losses to cryptocurrency related fraud exceeding $5.6 billion in 2023.
Here’s what to look out for:
Pig butchering scams. We have discussed the workings of pig butchering scams several times. Somebody contacts you out of the blue, sometimes pretending to be a friend you haven’t heard of in ages, sometimes a celebrity, and sometimes someone appearing to have the wrong contact details.
Once the conversation starts, the scammer will slowly move to the subject of interesting “investments” with the goal of cleaning out your accounts. The investments, mind you, are always part of the larger scam. By siphoning your money out of your accounts, and by sometimes even fabricating false “returns” on your investments, the cybercriminals are slowly building trust from you, only to yank away all your money at a later date.
Elon Musk livestreams. Scammers have used deepfake videos of Elon Musk and other wealthy celebrities to deceive investors. These scams make it appear as if this celebrity is discussing specific cryptocurrency opportunities and promising doubled returns on cryptocurrency deposits if victims send in their crypto. Remember, if a celebrity or public figure is suddenly making large promises on specific, individual cryptocurrencies, be cautious about their claims.
Fake crypto trading platforms. If you want to invest in cryptocurrency or want to get out now that the price is right for you, be careful where you conduct the trades. Unfortunately, we have seen a number of devastating exit scams and other deceptive operations where people’s life savings disappeared into thin air.
Advance fee scams. These are closely related to the fake crypto trading platform. In advance fee scams a “trader” asks for an upfront payment, promising a future service or huge return on investment. This is sometimes followed by additional requests to complete the promised transaction, which, as it turns out eventually, will never happen.
Fake bonus scams. Similar to pyramid schemes, there are sites where users would supposedly earn more based on the number of referrals and investment amounts made by their referrals. The victims did indeed see the number of tokens grow steadily. But when they tried to withdraw their funds, they got nothing.
Compromised account scams. Cybercriminals will send a warning to the target and claim that their account has been compromised. If the user responds, the scammers will try to obtain additional information such as the owner’s seed phrase, an important piece of information which thieves can use to empty the account.
Typosquatting. Similar to other typosquatting scams, imposters have registered domain names that are similar to or can easily be confused with legitimate cryptocurrency trading platforms. Should you enter your login credentials on such a fake site, the scammers will harvest them and log in on the actual site to take over your account.
How to protect your investments
A good resource for learning about crypto related scams is the Crypto Scam Tracker website of the California Department of Financial Protection and Innovation (DFPI) where you can find examples of the latest scams that are doing the rounds. Here is how you can stay safe from crypto scams (and other types of common scams found online):
- Use a password manager, it will refuse to fill out your details when it’s on the wrong website.
- Use multi-factor authentication (MFA) to make it harder for criminals to take over your account.
- Don’t respond to messages out of the blue, especially from people you don’t know.
- Don’t click on links in unsolicited emails or messages.
- Carefully research the platforms you plan to do business with.
And always act on the age-old adage: “If it’s too good to be true, it probably is.”
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