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Beware of Crypto Investment Scams

Jeremiah Fowler

Jeremiah Fowler

Beware of Crypto Investment Scams

Cryptocurrency investments often promise substantial returns and a new era of digital wealth. However, among the legitimate opportunities, a sinister underbelly of crypto investment scams thrives, preying on unsuspecting individuals eager to ride the crypto wave.

The Rise of Crypto Investment Scams

As cryptocurrencies gained popularity, so did the number of opportunistic fraudsters looking to capitalize on the trend. Crypto investment scams come in various forms, from fake Initial Coin Offerings (ICOs) to pyramid schemes and phishing attacks. These scams often target newcomers to the crypto space, exploiting their lack of experience and knowledge about the intricacies of blockchain technology.

Red Flags to Watch Out For

  1. Guaranteed High Returns: Scammers often promise unrealistically high returns on investments, tempting individuals with the prospect of quick and easy profits. Remember, if it sounds too good to be true, it probably is.
  2. Lack of Transparency: Legitimate investment opportunities provide clear information about the project, team, and technology. If you encounter vague or incomplete details, exercise caution.
  3. Pressure to Act Quickly: Scammers create a sense of urgency, pressuring victims to invest immediately to secure their spot. Legitimate investments allow you time to research and make informed decisions.
  4. Unsolicited Offers: Be wary of unsolicited offers through emails, social media messages, or cold calls. Reputable projects do not approach potential investors in this manner.

Real-Life Horror Stories

Recently, a friend of mine who is a novice crypto investor reached out to me asking if I could look into a company that promotes crypto mining and investment. The website promised returns that seemed too good to be true and had various other red flags. Unfortunately, by the time I got back to them with this information, my friend had already transferred several thousand dollars worth of Bitcoin. They were told they had earned a substantial return on their investment, but when they tried to withdraw their money, things took a dark turn. The fraudsters demanded additional fees to be paid before allowing the withdrawal; then, they threatened to close the account and call the police if my friend did not send more money. At this point, it was clear that the investment was fraudulent, there was no profit, and nothing would be returned.

I contacted the scammers directly, notified them of my investigation, and requested that they refund the money they had stolen from their victims. I also asked them for an interview, but they predictably ignored the message and will likely never return the cryptocurrency they have taken. I reported a list of domains, IP addresses, and other relevant information to multiple law enforcement agencies, but these criminals are often based in locations out of their reach. I also notified both the hosting providers and domain registrars of my investigation. This way, they can review the websites for terms-of-service violations, document any billing information, names, or other data pertaining to the scammers, and pass it on to law enforcement. Taking these sites offline and having their accounts suspended is important to prevent more victims and to disrupt the scam network. It should be noted that I was able to get around 60-70% of the domains I discovered suspended by the time of publication.

Protecting Yourself Against Scams

  1. Educate Yourself: Understand how cryptocurrencies and blockchain technology work. Arm yourself with knowledge to spot suspicious activities.
  2. Research Thoroughly: Investigate the project, its team, and its technology. Look for credible sources and avoid relying solely on information provided by the scammers.
  3. Use Reputable Exchanges: If you’re interested in investing, use well-known and regulated cryptocurrency exchanges. Avoid platforms with poor reputations.
  4. Beware of Private Key Requests: Never share your private keys or sensitive information. Scammers may ask for this information to steal your funds.
  5. Stay Informed: Follow news sources that cover the crypto industry. Being aware of current trends and potential scams can help you stay vigilant.

Read my full report on the crypto investment scam here.