Crypto scam
Washington financial watchdog warns of scam involving fake crypto ‘professors’
Published
2 months agoon
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A new scam is targeting cryptocurrency investors, with the bad actors masquerading as business “professors.”
According to a warning issued by the Washington State Department of Financial Institutions (DFI), the scheme starts with advertisements on social media platforms like Facebook, offering a lucrative investment opportunity.
When users click the link in the ad, they are redirected to a “Letter from the Professor” or “Letter from the Dean” on a website designed by scammers. To establish credibility, the scammers then claim to be associated with an “Academy,” “Business School,” or “Wealth Institute.”
Those interested are invited to a WhatsApp or Telegram group managed by individuals with titles such as professor, advisor, or assistant. The groups also include other members posing as investors, which the DFI says may be bots or part of the scheme.
In these groups, users are then offered daily trading signals and investment tips, claiming that these will result in huge returns.
The victims are introduced to a website that facilitates cryptocurrency trading and are encouraged to make investments using the information provided by the group.
The real scam plays out when the scammers offer the victims high-dollar loans or lines of credit to meet the capital requirements to participate in some of their offerings.
These bogus loans are processed informally on the messaging platforms. To make the process seem legitimate, investors are often asked to provide financial information, such as credit scores, and to sign fake loan documents.
If a victim isn’t interested in the loan offer, the “assistants” borrow cryptocurrency funds on their behalf and deposit the funds into the victim’s trading account. A screenshot is provided as proof of the transaction.
However, the DFI found these transactions to be fake as they have no record on blockchain explorers.
Victims are told they can repay the loan using profits made on the platform. However, when trying to do so, the victim’s accounts are frozen, and they are asked to repay the loan from their own pockets.
Scammers also threaten victims with legal action if they deny repayment.
“DFI has yet to receive a report where an investor was able to withdraw their funds by paying the loan back,” the announcement said.
The DFI also reported a scam using the same tactics, where a victim was duped of $300,000. The complaint was about the “Excellence and Innovation Fortune Business School,” which claimed to be a financial institution but was instead a front for the ICHCOIN cryptocurrency scam.
These sorts of scams, in which the bad actors disguise themselves as professionals, have become quite prevalent in the cryptocurrency space.
Regulators in the United Kingdom recently warned the public about an email scheme with scammers posing as lawyers. These fake advocates demanded cryptocurrency payments from victims by alleging that they owned videos that could harm their reputation.
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XRP Lawyer Weaponizes X Community Notes Against SEC Crypto Scam Alert
Published
5 days agoon
August 30, 2024By
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A recent post by the U.S. Securities and Exchange Commission (SEC) on X (formerly Twitter) has sparked significant backlash from pro-XRP lawyer Fred Rispoli. The SEC reiterated its warning regarding crypto scams. However, Rispoli leveraged X community notes to counter the claim.
XRP Lawyer Thrashes SEC’s Crypto Scam Warning
The SEC warning on X stated, “Scammers often use innovations and emerging technologies like #crypto to perpetrate investment scams,” urging caution among investors. The SEC’s post aligns with a May Investor Alert issued by its Office of Investor Education and Advocacy.
The alert warned of increasing crypto scam cases, where scammers exploit the popularity of digital assets to lure investors. The alert outlined five common tactics used by fraudsters, including establishing trust through social media and directing victims to fake investment platforms.
“Fraudsters Connect With You on Social Media Platforms or Through a Supposedly Accidental Text Message, and Then Gain Your Trust,” the alert stated, emphasizing the dangers of relationship-based scams, often referred to as “pig butchering scams.”
However, Rispoli quickly responded, requesting a review of the SEC’s post via X community notes. He accused the agency of misleading investors. He said, “The OP has scammed hundreds of thousands of investors into purchasing crypto given the agency’s all clear only to be rugged by the agency at a later date.”
This criticism highlights ongoing tensions between the SEC and the crypto industry. For context, the American watchdog allowed Coinbase to go public in 2021 but later crackdown on the exchange for alleged sale of securities.
The XRP lawyer’s response on the crypto scams warning reflects a growing disappointment amid legal actions against major firms such as Binance, Kraken, and Uniswap. These companies have faced scrutiny over alleged violations of securities laws. In these cases, the agency claims that many digital assets and trading platforms qualify as securities and should be regulated as such.
OpenSea Wells Notice
In a recent high-profile case, the SEC issued a Wells Notice to OpenSea, a leading NFT marketplace. The regulatory body threatened to sue the platform for sale of NFTs, which it deems to be securities. This move has drawn parallels to past cases involving other crypto firms.
OpenSea CEO Devin Finzer expressed shock at the SEC’s stance, arguing that the regulator’s actions could stifle innovation in the digital collectibles space. Finzer pointed out that the SEC has now entered the “uncharted territory.” He also suggested that many artists and creators could be negatively impacted by these regulatory measures.
This aligns with Rispoli’s claim of the SEC being behind ‘crypto scams’ that affect investors owing to ambiguous regulation. Adding further complexity to the debate, Ripple CLO Stuart Alderoty referenced a 1976 SEC ruling. At the time, the agency clarified that art galleries promoting and selling artworks for “investment motive” were not required to register with the SEC.
Alderoty argued that this precedent could apply to NFTs, which, like traditional art, are traded as collectibles rather than securities. “Fun fact: In 1976, the SEC ruled that art galleries, even when promoting and selling to buyers that had investment motives, didn’t need to register with the SEC,” he noted.
Kelvin Munene Murithi
Kelvin is a distinguished writer specializing in crypto and finance, backed by a Bachelor’s in Actuarial Science. Recognized for incisive analysis and insightful content, he has an adept command of English and excels at thorough research and timely delivery.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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Crypto scam
Nearly 45% of Ireland’s investment fraud cases involve cryptocurrencies
Published
2 weeks agoon
August 23, 2024By
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Ireland’s national police force has warned that almost half of all reported investment fraud cases involved cryptocurrencies.
According to a report from the Irish Independent, 44% of all investment fraud incidents in Ireland between January 2020 and August 2024 involved Bitcoin (BTC) and other cryptocurrencies. Most cases involved scammers posing as investment managers and defrauding victims by “cloning webpages and targeting victims through online and social media adverts.”
Scammers managed to steal over €75 million (roughly $83 million) from over 1,117 victims between January 2020 and August 2024, with €13.5 million stolen so far this year. 2023 saw the most losses, with €28 million stolen, a figure higher than the combined total for 2021 and 2022.
The report detailed one crypto-related incident where a victim saw an advertisement on a social media platform offering an investment opportunity into a mobile app-based trading platform. Upon signing up for the scheme, the scammers contacted the victim and socially engineered him into transferring €45,000 (roughly $50,000).
The scammers later informed the victim that their investments had supposedly generated over €727,000 (approximately $808,620) in profits, allegedly held in (USDC) stablecoin within an Ethereum-based Atomic Wallet. However, when the victim tried to withdraw the funds, they were asked to pay an additional $40,000 in dirty tax to gain access to the funds.
A dirty tax involves scammers falsely claiming that a victim must pay a fee or tax to access funds or profits. This is typical in investment fraud cases, as seen in a warning issued by the Washington State Department of Financial Institutions in July. In this case, scammers tricked victims into dubious crypto trading-related investments but froze their accounts when they tried to cash out their profits, demanding additional funds.
Michael Cryan, Detective Superintendent of the Garda National Economic Crime Bureau, warned that the scammers usually target “ordinary, decent people” and urged caution when transferring money internationally.
“The fraudsters involved in fraudulent investment schemes will sound convincing and claim to have insider knowledge but they are career criminals that are following a well-rehearsed script.”
Michael Cryan, Detective Superintendent of the Garda National Economic Crime Bureau
Crypto investment scams have become increasingly prevalent across various regions, with fraudsters enticing victims with promises of substantial returns. One of the largest crackdowns in recent times involved the Australian Securities & Investments Commission, which took down 615 websites linked to crypto investment scams.
Before that, Australia’s competition regulator sued Meta over a surge in Facebook advertisements that promoted crypto scams.
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Crypto scam
Whale loses over $55m in DAI stablecoin to phishing attack
Published
2 weeks agoon
August 21, 2024By
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A whale address lost a substantial amount of DAI tokens to a phishing attack after carelessly signing a fraudulent transaction.
On-chain data confirms that the losses amounted to a whopping $55.47 million in Dai (DAI). According to an X post by Lookonchain, the whale’s funds were stored in Maker, a decentralized finance protocol built on Ethereum.
However, after signing the fraudulent transaction, the ownership of these funds was altered, allowing the attacker to take full control of the DAI tokens in the wallet. When the whale tried to withdraw the funds, the transaction failed due to the unintended change in ownership. The hacker then swiftly moved the stolen DAI tokens to a newly created address.
Through this address, the attacker has since been converting the tokens to Ethereum (ETH) and rerouting them to other wallets. So far, the hacker swapped 27.5 million DAI for approximately 10,625 ETH, ultimately moving most of the funds to CoW, a trading protocol.
Phishing attacks have become increasingly common in the crypto scene. In June, a MakerDAO delegate lost $11 million in various tokens, including USDe, to a similar scam. In May, an NFT trader lost over $145,000 in Bored Ape Yacht Club collectibles, while another investor saw $101,000 in multiple cryptocurrencies vanish due to phishing.
Recent Chainalysis research confirms that since May 2021, approval attacks have accounted for an astonishing $2.7 billion in stolen assets. Previous reports also revealed that victims lost over $46 million to phishing attacks in February this year.
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