Cryptocurrency Scams Exploding Across America

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from Birch Gold Group:

Investing in cryptocurrency definitely means taking on risks. There’s an inherent volatility in this new asset class. Every time Elon Musk tweets, the crypto marks might surge or plummet 20%. Further, there’s a definite flavor of the Wild West in cryptocurrency exchanges, an aura of reckless enthusiasm cloaked in mystique. A lot of investors just don’t know much about what they’re buying. Prices fluctuate on rumors swapped in anonymous online chat rooms.

And there’s a lot of money at stake. The cryptocurrency market cap broke $2 trillion for the first time in 2021 and has flirted with $3 trillion.

This combination of uncertainty, poorly-defined regulation and massive stakes is catnip for financial scammers.

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Cryptocurrency investments often come with dizzying gains and heartbreaking losses. All too often, those losses are due to crypto scams.

The Squid Game rug pull

Here’s a recent example of just one of the risks of investing in questionable cryptocurrencies…

When news broke out that a Squid Game token, referring to an ongoing TV show, jumped by 75,000% and kept on going, it was hard to tell what’s going on. Another instance of new value? An opportunity to “get in on the ground floor” of the next Dogecoin?

As it turns out, it was as close to one of the oldest stock scams you’ll find, albeit in a different market. The “Squid” went from a penny to $2,861 in less than a week in late October, but those with any experience trading or investing might have already recognized what’s going on. The coin was absent from any of the top exchanges, and those who bought it on the debuting platform PancakeSwap quickly realized they could not sell the token. The website, which claimed this was part of “anti-dump measures”, was soon dismantled. And despite a warning issued early on by the top crypto price tracking website CoinMarketCap, some 43,000 investors lost an estimated $3.3 million as the coin’s issuers bailed.

A projected $113 million has been lost due to “rug pull” in the crypto market between January and July, mostly due to a mixture of excessive eagerness and a lack of research. A rug pull is simply a new name for a very old sort of financial fraud, the time-honored “pump and dump.” And as Investopedia warns:

The burgeoning popularity of cryptocurrencies has resulted in the proliferation of pump-and-dump schemes within the industry.

But this is only one example of why moving everything to the digital sphere might not be the best idea ever, despite what’s being touted.

Crypto scams cost Americans $20 million a month

The Federal Trade Commission (FTC) said that 7,000 people reported more than $80 million lost to crypto scams, in the four months heading up to March 31, 2021. That’s a stunning 1,000% increase over 2020.

The scams are quite familiar, with cryptocurrencies and digital wallets being just a slight alteration of all-too-rehearsed routines.

Many of these fall under the “romance, impostor or giveaway” category, where the scammers are posing as a person or entity in order to gain access to someone’s digital wallet. From there, they either send out the funds or obtain personal information for further scams down the line. (Sometimes, they do both.)

Crypto phishing

Cryptocurrency investing is, by definition, all online. And if there’s one thing we’ve learned about online services, it’s their vulnerability to being spoofed.

It’s not difficult for scammers to duplicate an exchange or hot wallet website and lure unsuspecting targets to it. Fake ads? Legit-seeming links that redirect the clicker to a dummy website? Fake referral links promising bonuses? Anything and everything you can think of to get the click.

And because websites and apps have so much authority over a person’s data, it’s not difficult to use stolen credentials to empty a cryptocurrency account, steal personal information, infect a phone or computer with malware or just log customer activity and wait for an opportunity to maximize their stolen profits.

Investment scams are always on the rise alongside new technologies and investor enthusiasm. Unfortunately, they aren’t always as easy for the savvy to spot as the Squid token rug-pull.

Ever since the crypto market shaped into a full-fledged industry, the Securities and Exchange Commission (SEC) has been cracking down on fraudulent Initial Coin Offerings (ICOs) and non fungible tokens (NFTs).

Yet the definition of “fraudulent” here can vary quite a bit. Even if a cryptocurrency makes it onto top exchanges, it can still fail to deliver what was promised. With over 15,000 cryptocurrencies available on over 400 exchanges, the SEC and FTC would never be able to keep up even if they had the authority to do so.

As always, caution and due diligence remain a scammer’s worst enemy. Know what you’re buying, and know why you’re buying it.

Read More @ BirchGold.com



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