Rise in Cryptocurrency Scams - Cyber and Fraud Centre

Lloyds Banking Group (LBG) has warned customers of a 23% rise in Cryptocurrency scams compared to 2022. LBG found that 66% of investment scam cases begin on social media, with Instagram and Facebook as the most common sources. The cases often start with fraudulent adverts, fake celebrity endorsements and direct messaging, with the most common age range of victims being 25 to 34-year-olds, who make up a quarter of all cases.

On average, victims make three payments before they realise and report the scam, which is around 100 days from the date of the first transaction. Revolut is a favoured destination for scam payments among LBG customers before the funds are moved on elsewhere. In some cases, there will be an actual investment account held in the victim’s own name and registered with a legitimate platform, such as Coinbase or Binance.

The victim will be shown how to set this up, or it will be opened on their behalf, as many trading platforms carry out limited checks when opening new accounts. Once funds have been deposited, victims may be tricked into handing over their account login details or passing control of their digital wallet over to the fraudster.

Spotting the Red Flags

Several key indicators can help you identify a potential cryptocurrency scam:

Guaranteed Returns: No investment can guarantee returns without risk. If an opportunity seems too good to be true, it probably is.
Pressure to Invest: Legitimate investment opportunities will not rush you into making a decision. Be wary of any scheme that requires immediate action or investment.
Lack of Transparency: Genuine investment platforms will provide clear information about their operations, including who owns the company, where it is registered, and its financial performance. If this information is missing or difficult to find, it’s a red flag.
Unsolicited Offers: Do not entertain unsolicited investment offers, especially those received directly via social media messaging apps – WhatsApp, Telegram, email, or text message.
Remote Desktop Software: Be equally cautious of any platform or company that has any links to remote desktop software, such as ‘Any Desk’ or ‘Teamviewer’, and offers to remotely access your computer to assist with setting up accounts.
Sharing of Login Information: Companies that want you to share your account login information should be avoided. Login information, seed phrases, and private keys should never be shared online and should be kept in a safe place at home.

Chain Abuse: A Valuable Tool in Your Defence

In the fight against cryptocurrency scams, knowledge is your best defence. Chain Abuse (https://www.chainabuse.com/) provides a valuable resource for those interested in getting into crypto or for seasoned investors alike. It offers a way to check crypto entities’ potential links to fraudulent activities. By inputting a cryptocurrency or website address, users can access a wealth of information about its associated transactions, helping to identify if it may be part of a larger scam network. This tool can be instrumental in conducting due diligence before making cryptocurrency investments.

Protecting Yourself

In addition to recognising the red flags and utilising resources like Chain Abuse, there are several steps you can take to protect yourself:

Educate Yourself: Understand the basics of cryptocurrency and blockchain technology. The more you know, the less likely you will fall for a scam.
Research: Before investing, thoroughly research the opportunity. Look for reviews and check for any regulatory warnings.
Secure Your Investments: Use secure and reputable cryptocurrency exchanges. Enable two-factor authentication and keep your digital wallets and keys safe. Never share your private keys with anyone or save your seed phrase online. Consider a hardware wallet for the most secure form of storage.
Report Scams: If you suspect a scam, report it to your local law enforcement agency and the Financial Conduct Authority (FCA) in the UK.

The cryptocurrency world offers exciting opportunities for new and experienced investors, but it’s essential to navigate this landscape cautiously. By staying informed and vigilant, you can protect yourself from the pitfalls of fake investment scams and make the most of what the digital currency market offers.

22.11.23

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