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
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