Scams involving cryptocurrency and five strategies con artists use to trick victims

Introduction:

In the social media age, con artists are still using the rising demand for digital assets to trick regular people and small-time investors. They frequently cause them to suffer catastrophic losses.

“Digital assets” refers to tokens, coins, and cryptocurrencies, including those sold in initial coin offerings (ICOs).

Investors may become less cautious or succumb to FOMO, or the fear of missing out, if an investment opportunity presents something innovative or cutting edge.

If you’re thinking about investing in digital assets, spend some time learning about the investment’s operation and evaluating its dangers.

Keep an eye out for indicators that it could be a fraud.

As I mentioned in previous articles, cryptocurrencies, coins, tokens, or crypto can all be considered crypto assets.

Scammers frequently exploit innovation and new technologies to perpetrate investment frauds.

Cryptocurrency investments were no exception.

It can be difficult to track down and collect monies from fraudsters, which makes recovering money from them problematic. Fraudsters, for instance, can use technology to conceal their identity or obfuscate the source of money when using cryptocurrency assets.

It can also be challenging to recover your money from a scam using cryptocurrency assets, as con artists have the ability to transfer your money quickly outside.

Scammers employ a range of strategies to persuade investors to part with their hard-earned cash.

Five strategies that con artists use to lure victims into cryptocurrency securities scams

Here are five things to be aware of in order to prevent losing money to cryptocurrency asset scams.

Social media: “pig-slaughter scams”

After establishing contact with you via social media or an ostensibly random text message, scammers try to win your trust.

Scammers may contact potential victims via spam text messages or social media platforms, such as meetups, professional networks, messaging websites, and apps.

They can pretend to be an old friend or claim to have accidentally gotten in touch with you.

The con artist may then form a romantic or platonic relationship to gain your trust and convince you to invest your money before it disappears.

Sometimes, the term “pig-slaughter scams” is used to describe these trust scams, which are as unsavoury as the scammers’ actions.

One way this kind of fraud works is that the con artist may tell you about profitable trading or investment options, including cryptocurrency asset investments, once they have built an online profile with you.

The con artist might even claim that a friend or family member of theirs is an “insider” or works for a financial company and can supply trade knowledge.

In an effort to further win your trust, the fraudster can lead you to a seemingly genuine (but phoney) website or a popular app that you can download from a reputable app store.

They may even allow you to withdraw a small portion of your “profit” via the app. The con artist may next ask you to make higher financial investments.

Scammers frequently come up with a reason why you can’t withdraw your money, or they could inform you upfront that you need to make additional payments to cover fees or taxes.

Paying extra usually results in a loss of money because there is often no way to recover your investment or make a profit.

For everyone with whom you’ve only interacted via the app or online,

Avoid allowing their advice or influence to shape your investment decisions.
Con artists may instruct you to obtain Bitcoin for your investment deposit at a Bitcoin ATM (or kiosk) or via a cryptocurrency platform, after which they will provide instructions on where to send the Bitcoin.

Be cautious if someone asks you to use cryptocurrency assets to pay for the investment.
Don’t tell them anything about your identity or personal finances.

Don’t give them anything like your date of birth, social security number, passport, driver’s licence, bank or brokerage account information, tax forms, credit card, or passport.

Artificial intelligence (AI)

Fraudsters are taking advantage of the excitement surrounding emerging technology, such as artificial intelligence.

Fraudsters can entice investors to purchase cryptocurrency assets by using the rising appeal of artificial intelligence.

Purchasing crypto assets tied to artificial intelligence may seem thrilling, but proceed with caution.

Con artists frequently use propaganda about cutting-edge technological advancements, including new AI technologies, to deceive investors.

Scammers may promise you large sums of money and use enticing language related to artificial intelligence, all in an attempt to defraud you of your money.

They may claim to have AI-powered bots that they use to identify the best cryptocurrency asset investments.

Fraudsters may also employ artificial intelligence to generate convincing websites or marketing materials that advertise investment frauds, particularly those involving cryptocurrency assets.

In a similar vein, they can produce “deep fakes” by cloning, manipulating, or spoofing voices, images, and videos in order to trick investors using artificial intelligence technology.

To win your trust or persuade you to contribute money, they might even make up false personas that mimic famous people, public servants, or your loved ones.

Fraudsters pretend to be trustworthy sources or exploit them

Note that official sources may appear in correspondence such as emails, letters, certificates, voicemails, texts, phone calls, and messages on social media.

The use of artificial intelligence technology has made it much simpler for con artists to pose as representatives of governmental bodies, businesses, and private citizens in order to trick investors.

Using artificial intelligence (AI) to produce deepfakes, scammers can even pose as your friends or relatives. Additionally, they can break into the social media accounts of your friends or family members and post or send messages purporting to be from them.

As an illustration, con artists can claim that a friend or member of your family has mastered cryptocurrency and invite other people to participate in trading or investing.

Even if you’re sure they’re the source, be wary that friends and family were duped into thinking an investment is real.

Scammers occasionally prey on communities or groups by enlisting leaders or other influential people to make investments on their behalf without disclosing to them that the “opportunity” is a scam.

Pump and dump schemes

Scammers may overvalue cryptocurrency assets, then sell them for a profit.

Scammers can carry out pump and dump schemes involving cryptocurrency assets, such as so-called “memecoins” that reference internet memes or popular culture.

Scammers, for example, might make a memecoin and then promote it on social media to entice people to purchase it and “inflate,” or raise, its value.

Then, before the excitement fades, the promoters and others who collaborate with them “dump” or sell, making money off of the increased price.

Typically, once the promoters sell and pocket their winnings, the price quickly drops and the other token buyers lose most of their money.

Never base an investment choice exclusively on data from applications or social media platforms.

Fraud involving advance fees

Fraudsters want more money—which they falsely claim will let you withdraw or recover your losses.

In investment scams, such as those involving cryptocurrency securities, con artists could ask you for extra money in the form of charges, fees, or taxes before allowing you to take money out of your account.

This is an example of an upfront charge scam, where the scammer asks potential investors to pay a false fee up front before they receive any benefits.

For example, con artists may pretend to inform you that a regulator has blocked your account or is looking into it. To unfreeze your account, you may be required to pay a sizable deposit, charge, or tax amount.

However, in the unlikely event that you make a payment, you will forfeit both the additional payment and the initial investment.

Scammers can even deceive you into paying additional fees by claiming to have “mistakenly” deposited money into your account and requesting that you reimburse them.

It is really a ruse to encourage you to pay them more money; they never really deposit money into your account.

If you have already lost money or cryptocurrency holdings as a result of fraud or bankruptcy, scammers may also target you. In an attempt to “help” you recover your losses, scammers may ask you to send them your private key, enabling them to access your cryptocurrency holdings or encourage you to invest more cash or cryptocurrency.

In real life, if you pay, you most likely won’t receive your money back and will instead fall victim to another scam.

This post was written by Mario Bekes