The U.S. Federal Bureau of Investigation (FBI) recently issued a warning to citizens about crypto scams increasing during this present COVID-19 pandemic. Crypto fraudsters have constantly preyed on vulnerable victims in their weakest moments, with the coronavirus pandemic being the latest avenue for the scammers.
Crypto scams seemed to have progressed over the years with fraudsters using updated and sophisticated methods that evade governments’ radar. To reduce the number of victims that fall for fake crypto schemes, regulatory bodies globally have warned investors to beware of offers that seem too good to be true.
Crypto Scams Increasing as Coronavirus Spreads
According to a press release on Monday (April 13, 2020), the FBI stated that there will be an increase of crypto scams during this COVID-19 pandemic. The virtual currency fraudsters target people of different ages who hold bitcoin and other digital currencies.
An excerpt from the press statement reads:
“There are not only numerous virtual asset service providers online but also thousands of cryptocurrency kiosks located throughout the world which are exploited by criminals to facilitate their schemes. Many traditional financial crimes and money laundering schemes are now orchestrated via cryptocurrencies”.
Also, crypto fraudsters are taking advantage of the current fear of the coronavirus to steal from funds from unsuspecting individuals. While the FBI acknowledged that there are real investment schemes, e-commerce platforms, and charities that accept crypto payment, any pressure to receive crypto is a red flag.
Furthermore, these scams could come in different ways, which include bogus crypto investment schemes offering a hyperbolic return on investments, and remote work scams where fake employers request people to accept donations probably stolen from other people.
Another method involves crypto scammers who use the traditional blackmail method to get their victims to succumb. However, rogue actors have spiced up their blackmail technique during this COVID-19 pandemic.
In addition to releasing sensitive information, the bitcoin scammers also threaten to infect the victim and the victim’s family members with the coronavirus, unless payment is made to a specified BTC wallet. The crypto fraudsters also use deceptive methods to lure victims into buying fabricated products that allegedly cure COVID-19.
Citizens and potential investors are advised to verify the legitimacy of vendors and investment schemes before sending donations or payments in crypto; avoid revealing personal financial details, and report incidents of blackmail and extortion.
Rogue Actors Use Extortion Emails to Get Bitcoin Ransom
In another development, New Zealand authorities were investigating cases of extortion scams via emails, where victims were asked to pay a ransom in bitcoin. According to the official publication, the targets for the scam are victims who visit pornographic sites.
Victims receive an email from hackers who state that they are aware of the victim’s internet history which includes a visit to porn sites. The scammers further threaten to release the information to the public, unless the victims pay a ransom fee of $1,900 in Bitcoin.
Callum McNeill, a Detective Senior Sergeant, said that fraudsters have carried out this method of extortion scam since 2018. The Sergeant also stated that bad actors claim knowledge of victims’ passwords.
Also, some victims agree to the conditions of these extortionists because of the fear of seeing their leaked video online. However, the local police asked residents to ignore and delete such extortion scams, while victims should report to authorities.
More Sophisticated Cryptocurrency Fraud in 2020
Crypto scams are on the rise, as rogue actors are employing more sophisticated methods and use any available means to fleece victims. As reported by Blockonomi earlier this month, the social media giant Facebook sued one of its users for using a cloaking method to promote fake bitcoin investment schemes and COVID-19 news.
Also, the UK’s fraud agency warned citizens not to pay attention to fraudulent emails from crypto scammers asking for donations to the NHS. The U.S. Department of Justice accused three individuals involved with a fake crypto mining scheme that generated over $700 million.