Digital assets include convertible virtual currencies and cryptocurrencies such as Bitcoin, stablecoins and non-fungible tokens.
There are a growing number of people who are being approached by digital asset scammers on popular social media outlets like LinkedIn. The scammers are skilled in how they target their victims. They learn about their victims’ personal lives by searching social media accounts and publicly available open-source information. They use this information to strike up online conversations and make victims believe they have a lot in common. Scammers prefer apps like WhatsApp, Telegram and WeChat to speak with victims.
"I met a really bright guy on LinkedIn. His name is Frank, and three weeks ago he persuaded me to invest all of my money in digital assets on the same exchange that made him a multimillionaire. Yesterday, I discovered that Frank was actually a masterful scammer who’s left me broke. I am ashamed to tell my friends or family about it.”
How are bogus digital asset exchanges perpetrated?
Scammers tell victims that their digital asset exchange transformed them into multimillionaires. They persuade victims to sign on with bogus digital asset exchanges and invest a modest amount of money. When victims check their account balances a few days later and see impressive gains, the scammers encourage further investment with the ultimate goal of stealing all of the money.
Protect Yourself
If someone you do not know calls you or sends you a message via social media, email or text, hang up or delete the message and report it as junk. Do not respond.
If you are interested in trading on a digital asset exchange, first do your homework by verifying whether the company is legitimate. Check with government authorities responsible for regulating the company. An exchange is also considered a money service business and, therefore, must be registered. You can check whether it is registered at gov/msb-state-selector. If the company isn’t registered, avoid it.
Check to see if the company has a physical address. If it does, run an online street-view map search. If it has no street address or the street address search doesn’t match up to what you would expect to find (e.g., it’s an abandoned lot), avoid it.
Does the company have a working customer service number? If it doesn’t, avoid it.
The exchange may claim to be in business for a significant time. To verify, search the company’s web address at lookup.icann.org. If the company was registered just a few weeks ago (as opposed to years), it’s likely a scam.
If the company’s website won’t accept transfers from your bank, but rather insists that you convert dollars to cryptocurrency first and then transfer the crypto to them, it is likely a scam.
If the company claims its investments are risk free and/or it guarantees you investment returns based on how much you invest (e.g., the more you invest the larger your guaranteed rate of return), it is likely a scam. No one can guarantee a rate of return on investments and basing your returns on the amount you invest is a sure red flag of fraud.
Report Fraud
If you believe you are the victim of a digital asset exchange scam, you can contact the DISB Enforcement and Consumer Protection Division at 202.727.8000. You may also contact the Secret Service at CryptoFraud@SecretService.gov, or the Metropolitan Police Department’s Financial and Cyber Crimes Unit at either 202.727.4159 or mpd.fraud-unit@dc.gov.
*Article shared courtesy of DC Department of Insurance, Securities, and Banking (DISB)
Comments