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- Canadian Securities Administrators Subject Crypto Exchanges to Securities Laws
Two different reports of two utterly different entities were published recently, and both of which indicate the same conclusion: crypto scams are on the rise, and already succeed in stealing millions from gullible individuals.
The U.K.’s national fraud and cyber crime unit, Action Fraud, published on August 10 a report whose purpose is to inform and warn the public about cryptocurrency frauds that have already caused over £2 million worth in losses this summer. Action Fraud discloses that just in June-July cryptocurrency scams managed to swipe nearly £2.1 million through get-rich-quick schemes with an average loss of £10.1K per victim (!), while 203 such cases were unearthed by the unit.
The scammers apparently target unsuspecting users on the social media, prompting them to give away sensitive private information such as credit card details in order to open a trading account on fake crypto investment websites. The scammers then attempt to induce the victim to deposit as much money as possible until ultimately they completely shut down the site and disappear. The report also adds that in some cases, the scammers used the likeness of well-known figures (without their consent obviously) to lure the victims in – a familiar fraudulent method.
Action Fraud posted several tips for consumers not to be fooled:
Don’t assume it’s real – professional-looking websites, adverts or social media posts don’t always mean that an investment opportunity is genuine. Criminals can use the names of well-known brands or individuals to make their scams appear legitimate.
Don’t be rushed or pressured into making a decision – a genuine bank or financial organisation won’t force you to part with your money on the spot. Always be wary if you’re pressured to invest quickly or promised returns that sound too good to be true.
Stay in control – avoid uninvited investment offers, especially those over cold calls. If you’re thinking about making an investment, get independent advice and thoroughly research the company first.
The second report was published by the cybersecurity company, Kaspersky Lab, on August 14 and portrays a very similar picture. Kaspersky informs that just in the second quarter of 2018 alone, the company’s software blocked 58,000 attempts of unwary users to visit phishing websites that pretended to offer all sorts of crypto services such as wallets and markets. The report specifies that in many cases fraudsters impersonated as actual ICO projects (sometimes even before the real ones went live), enticed the users with token giveaways, and eventually persuaded the users to invest.
The report further details that the most popular cryptocurrency with the scammers is Ethereum (ETH)trade, which is not surprising since legitimate ICOs mainly use this cryptocurrency (which might now also lead to its price decline). In Q2, cybercriminals succeeded in stealing more than $2.3 million with these kinds of ICO scams. Interestingly, this report also mentions that fraudsters are using the portraits of celebrities to cajole users; this quarter, the most popular celebrity likenesses that were utilized by cryptocriminals were of the tech magnate Elon Musk, the Russian entrepreneur Pavel Durov, and the co-founder of Ethereum Vitalik Buterin.