Coinbase is raising awareness about the rise of online scams targeting younger users, particularly Gen Z. 

In a blog post published on Oct. 8, Coinbase outlined four online threats Gen Z should be aware of, including social media fraud, romance scams, fake websites, and recovery schemes.

Coinbase emphasized that crypto users must take personal responsibility for securing their assets. Unlike traditional banking, where institutions provide a level of security, crypto owners control their assets directly, making them both their own safeguard and biggest security risk.

Social media scams

One of the major scams Coinbase warned about involves social media platforms like Instagram and TikTok, where fraudsters create fake profiles or impersonate well-known figures. 

Scammers often introduce seemingly legitimate investment opportunities to unsuspecting users, but these offers are rarely genuine. Coinbase advises users to be cautious of unsolicited messages from strangers promoting crypto investments.

A recent example of this scam took place in Vietnam, where five suspects involved in a crypto fraud network used social media to build fake romantic relationships and lure victims into investing in a fraudulent platform. 

The scammers defrauded victims of over 17.6 billion Vietnamese dong ($700,000) through their scheme.

Romance scams and fake websites

Another growing threat Coinbase mentioned is romance scams, often called pig butchering scams. 

Romance scams involve fraudsters befriending victims under the pretense of a potential love interest. These scammers pretend to form personal connections to gain victims’ trust and then exploit them financially. These schemes often occur on dating apps or social media platforms.

Scammers also use fake websites to trick victims into providing personal information or sending funds. Many of these sites mimic legitimate companies but have minor differences in their URLs.

Similarly, on Oct. 3, a U.S. citizen filed a lawsuit after losing $2.1 million in Bitcoin (BTC) due to a pig butchering scam involving fake crypto exchange websites. Just as Coinbase warned, the scammers operating from Southeast Asia used these fraudulent sites to simulate trading and steal funds from the victim. 

Boosting awareness and reporting scams

In 2023, over 67,000 online scams were reported, per Coinbase, with the median loss reaching $3,800. 

Coinbase stressed that raising awareness and reporting suspicious activity can help prevent others from falling victim to similar scams. The company encourages users to report scams to law enforcement and platforms like Coinbase to aid in the fight against cybercrime.

With crypto ownership comes responsibility, and Coinbase’s message to Gen Z is clear: Stay vigilant, know the risks, and help protect the community from fraud.

A recent United Nations report showed that criminal networks in Southeast Asia are increasingly using the messaging app Telegram to facilitate illicit activities, ranging from trading hacked data to laundering money through unlicensed cryptocurrency exchanges. 

The UN Office for Drugs and Crime found that organized crime syndicates are exploiting Telegram’s loose moderation and encrypted messaging features to carry out large-scale illegal operations. The UN’s findings, as reported by Reuters, highlight the vast scale of cybercrime and money laundering on the platform. 

Criminals use the app to trade sensitive information, including credit card details and passwords, while purchasing tools like malware to steal funds via the messaging app.

According to the report, unlicensed crypto exchanges advertised on the app offer services that enable money laundering for criminal organizations. 

Telegram’s role Southeast Asian crime

The report focuses on Southeast Asia, where Chinese crime syndicates operate billion-dollar fraud schemes. According to the UNODC, these operations generate between $27.4 billion and $36.5 billion annually.

The report cites one example of a group advertising that it can move $3 million worth of stolen Tether (USDT) per day.

Last week, Vietnamese police dismantled an international crypto fraud network operating from Laos’ Golden Triangle Special Economic Zone, arresting five suspects. The scammers swindled over 17.6 billion VND through fake romantic relationships and fraudulent investments on a platform called “Biconomynft.”

Telegram’s dance with law enforcement

Telegram has close to 1 billion users, but its founder, Pavel Durov, has come under recent scrutiny. In August, Durov was arrested in Paris, charged with allowing the platform to facilitate criminal activities, including the distribution of child sexual images. 

This has sparked debates about messaging platforms’ responsibility to prevent criminal activity while balancing users’ privacy rights.

For those unfamiliar with crypto, platforms like Telegram play a key role in enabling encrypted communication but can also be misused. Criminals can exploit assets to move funds quickly and anonymously, making it difficult for authorities to track the flow of illegal money.

After his arrest, Durov announced updates to the platform’s moderation policies in response to concerns over the misuse of its search functionality. He stated that Telegram may disclose the IP addresses and phone numbers of rule violators to authorities following valid legal requests.

The FBI is sounding the alarm on a cryptocurrency scam that’s cost some Americans their entire life savings.

According to an abc13 report, the bureau alleges that ICHCoin, which lured victims under the pretense of offering a crash course on cryptocurrency investing, is an elaborate scam that has siphoned millions of dollars from individuals across the United States.

FBI Houston’s assistant special agent in charge Amanda Culver told the media outlet that the perpetrators behind the scam have been duping people since December 2023 and have stolen roughly $30 million via the ICHCoin app. Some victims had allegedly lost their entire lifesaving.

Culver added that scammers can easily find victims as “people are very interested in investing in cryptocurrency,” emphasizing the importance of doing proper research before making any investments.

The FBI is currently investigating the scam and has urged victims to come forward with information regarding ICHOCoin or similar scams by filling out their online questionnaire.

How the ICHCoin scam works

According to Culver, the scam works in multiple stages. First, scammers approach victims on social media platforms like Facebook and Instagram. The icebreaker is an offer to educate the victim on cryptocurrency investing, promising to open doors to lucrative profits through crypto investments.

Once victims are convinced, they are redirected to messaging platforms like WhatsApp, where a fake professor or teacher contacts them to proceed with the scam. While Culver did not provide more details on how the scam plays out from here, the Washington State Department of Financial Institutions had flagged ICHCoin in one of its warnings in July. 

At the time, crypto.news reported that the victims were lured into the “Excellence and Innovation Fortune Business School,” which is a front for the ICHCoin scam and were added to groups controlled by these fake academics, which offered daily trading signals and investment tips for massive returns.

This is also where the victims are introduced to a fake crypto trading platform, in this case, the ICHCoin app, and urged to make investments. Culver added that the scammers often urge victims to lie to the banks when making transfers to these platforms. The app also shows false return on investment data, but when attempts are made to withdraw any profits, the accounts are frozen, or the scammers ghost the victim.

She also stressed the importance of recognizing red flags, particularly when receiving “unsolicited messages” promising high returns or offering “free money” to investors, emphasizing that these are clear warning signs.

FBI hunting crypto scammers

Over the past months, the FBI has increased its crackdown on cryptocurrency scams and ramped up investigations. The bureau issued warnings regarding crypto threats on multiple occasions in September alone. 

For instance, on Sept. 3, the FBI cautioned businesses dealing with crypto exchange-traded funds that the notorious North Korean hacking group Lazarus started using “complex and elaborate” tactics to infiltrate their systems. In a subsequent report, the bureau revealed that over $5.6 billion was lost in frauds and scams involving cryptocurrencies, with individuals over 60 as the most targeted demographic.

In early October, the federal agency also charged an individual with attempting to extort cryptocurrency assets.