Crypto Sector Scams – As crypto adoption increases , scammers are getting more creative in their actions. US regulators have issued warnings about a new type of scam targeting crypto investors, with scammers posing as professors or academics. Social media platforms such as Facebook, WhatsApp, and Telegram have become a means for cybercriminals to find and communicate with potential victims, with the aim of draining their crypto assets through elaborate schemes.
The Washington State Department of Financial Institutions ( DFI ) Securities Division has seen an increase in complaints about this new type of scam. According to the DFI, scammers claiming to be professors or deans of business schools or wealth institutes have been contacting people offering courses related to the crypto sector.
“The scam usually starts with investors being recruited into a WhatsApp or Telegram group. The ‘professor’ and the founder of the company provide investment courses such as ‘daily trading signals’ that yield very high returns,” DFI explained.
Some scammers give victims some crypto tokens to test their ‘storage’ on the platforms promoted by these bad actors, with promises of high returns. Some scammers also offer informal credit and loan facilities via messaging apps to ‘help’ victims invest in high-yielding crypto initial coin offerings (ICOs), NFTs, or altcoins.
In some cases, the DFI said, fraudsters asked their group members to pose as “genuine investors” in WhatsApp and Telegram groups used to communicate with their victims.
“When investors tried to repay their loans, the company informed them that their accounts would remain frozen until they were able to repay the loans using external funds. When they were unable to do so, investors received threatening messages,” DFI added.
It is currently unknown how many victims have been affected by this scam. DFI has also not released the number of complaints they have received regarding this issue in recent months.
Meanwhile, scammers are getting more sophisticated in their search for crypto victims. Many are designing legitimate-looking apps and websites to convince unsuspecting victims to get involved in their schemes.
“These companies may post various documents on their websites from regulatory or government agencies as a way to appear legitimate. When investors start reporting the allegedly fraudulent companies and platforms, the companies may announce that they are undergoing a ‘merger’ without providing additional details,” the regulator said, urging investors to verify the legitimacy of any crypto-related website or app they choose to engage with.
Back in June, the US Federal Trade Commission (FTC) warned the crypto community about a rise in romance scams – where fraudsters persuade people to invest in dubious crypto tokens by pretending to be looking for a romantic relationship.
This scam further demonstrates the importance of vigilance and verification in the world of crypto investment. Investors should always ensure that they are dealing with legitimate and trusted parties, and not be easily tempted by promises of returns that are too tempting. In this way, they can protect their crypto assets from increasingly creative and cunning fraudsters.
