When disaster strikes and cybercriminals vanish with your cryptocurrency, having access to a reputable crypto asset recovery service is critical. In the past two years, people have lost more than $1 billion in crypto scams, and many of those victims will never see their funds again.
Crypto is an exciting and empowering avenue for investment, but it comes with risks. If you're currently active in the crypto marketplace, or if you hope to be in the future, understanding the different crypto scams that exist and how to avoid them is important, but it isn't the end of the story. It's equally vital that you have a plan in place so that you can respond quickly to reclaim your crypto if it ever falls into the wrong hands.
Types of Crypto Scams
The crypto marketplace has become more mainstream and crypto investors have become more experienced. As a result, the number of people falling for crypto scams has declined over the past year, with total scam revenue down by 65%. While this is certainly good news, it doesn't mean that crypto investors are in the clear. Scams remain a very real threat, particularly for those who are new to the market. The variety of potential scams further complicates an already challenging situation.
Phishing scams are one of the most common forms of digital fraud. Bad actors send an email or text message with a malicious link or file attachment and trick victims into providing their login information and account details. Cryptocurrencies are particularly vulnerable to phishing because crypto keys provide full access to your funds. If phishing fraudsters dupe you out of your keys, they can easily scoop up your crypto before you even have a chance to realize it.
As the name suggests, an investment scam involves promising potential investors that they can make big money by sinking their crypto into a new project. Once you invest your crypto in this mysterious opportunity, it vanishes, taking your investment contact along with it.
Dating apps have provided crypto scammers with a whole new avenue for fraudulent activity. They build relationships with unsuspecting parties, taking the time to establish trust before suddenly making an emergency request for a crypto transfer. After you send the money, the love interest and your crypto are never seen or heard from again.
Fake Exchange and Wallet Scams
Sophisticated cybercriminals can create fake crypto exchanges and wallets that appear to be authentic. They invent new, exciting crypto businesses or create a URL that mimics a legitimate company so that users willingly use their services to transfer and store funds. Only after you have made a deposit does it become clear that the service was never real at all and that your assets are long gone.
Although crypto scams as a whole are a developing area of crime, SIM swaps in particular are newly charted territory. In these scams, criminals use the information from your cell phone to request a replacement SIM card from your phone provider. They can then download your information and bypass any two-factor authentication systems that might be in place, ultimately accessing your crypto funds.
Rug Pull Scams
Rug pulls made major waves in 2021 when the founder of crypto exchange Thodex vanished with $2 billion worth of investors' funds. Similar to an investment scam, rug pulls involve scammers aggressively promoting a new project, like an NFT or coin, so that people will enthusiastically invest their money. Once investors have sunk their funds into the project, the bad actors disappear, and the victims find that the coin they purchased is effectively worthless.
Examples of Crypto Fraud
Over the years, hundreds of thousands of people have fallen victim to crypto scams. Fraudulent activity ebbs and flows, with seemingly calm periods interrupted by incredibly disruptive events. Thus, even as scams seemed to have subsided in 2022, new fraud attempts were waiting on the horizon. These examples of scams from the past year are indicative of how fraudulent activity comes in so many different forms and scopes.
When FTX collapsed, it sent shockwaves through the crypto community. The rise and fall of FTX are complex, with criminal charges recently pressed against founder Sam Bankman-Fried. An interesting extension of the FTX uproar, however, is the creation of new scams that capitalize on its collapse. In particular, scammers have created a deepfake of Bankman-Fried as a giveaway scam. The fake video claims that the founder wants to give refunds for lost money, in an attempt to get investors' information and rob them of additional funds.
JuicyFields.io was a platform where users could buy, sell, and manage cannabis plants in virtual greenhouses. Investigators now suspect, however, that JuicyFields, which asked investors to deposit money and cryptocurrency, has actually stolen $273 million worth of cryptocurrency from unknowing individuals. The operation abruptly shut down in July 2022, leaving investors without a means of recovering their funds.
February 2022, world-renowned broadcaster BBC suddenly pulled an article and a planned documentary focusing on Hanad Hassan. Hassan, a 20-year-old self-labeled millionaire, claimed he had made a fortune in crypto and used his wealth to not only fund his luxurious lifestyle but also to support various charities. When the story initially broke, investors came forward to report that they had been scammed out of their money through Hassan's fake crypto called Orfano.
How to Prevent Crypto Scams and Protect Your Investment
Protecting your crypto from scams ultimately comes down to diligence and research. While bad actors are savvy, they also have ways of revealing their ill intentions. When you deal in cryptocurrency, keep these recommendations in mind:
- Stick to popular brands: Only use well-known, established exchanges and wallet services.
- Verify and reverify: Check links and email addresses for misspellings or strange wording.
- Deflect phishing attacks: Ignore unsolicited emails and messages, even if the contents are enticing.
- Avoid unknown entities: Tread carefully when considering transferring crypto funds to anyone who makes a request via social media or dating apps.
- Do your research: Thoroughly investigate any investment opportunities to ensure that they're legitimate.
- Implement security: Use cybersecurity measures, including multi-factor authentication and strong passwords, to protect any and all crypto accounts.
- Be realistic: If an opportunity sounds too good to be true, it probably is, and it's in your best interest to steer clear of it.
Unfortunately, even crypto users who are experts in technology and fully aware of potential scams can fall victim to fraud under certain circumstances. If that occurs, don't hesitate to respond. Immediately place a hold on your account and seek help with recovering any lost funds.
How to Rescue Your Crypto with AMLBot
If you fall victim to crypto fraud, there are options to restore your funds. AMLBot has an experienced team of experts that specialize in crypto asset tracing. If you discover your crypto funds have been stolen, time is of the essence. When you initiate an investigation with AMLBot, a number of steps will occur:
- Contact: When you realize your funds are gone, reach out to AMLBot as quickly as possible. Include a description of what happened, the address of the wallet involved, when your funds disappeared, and any other details you can provide.
- Analysis: The experts at AMLBot will analyze the situation and determine whether there is a viable path to salvage your funds. The team uses sophisticated crypto-tracing tools to locate the route of any stolen funds.
- Report: After the investigation is complete, we will provide you with a detailed trace report that includes any relevant addresses, transactions, and connections. We'll also include any specific comments from our expert team.
- Document: Based on the outcome of the report, AMLBot will help you prepare and file the necessary documents with law enforcement.
- Identify: To protect other victims in the future, we will attempt to publicly identify the fraud perpetrator if the funds were sent to a centralized exchange.
- Recover: If circumstances escalate and you have to take your crypto case to court, AMLBot will provide you with a lawyer and assist you with recovering your funds.
The specific services that you receive from AMLBot depend on which plan you select. You can choose from three plan levels based on your situation and needs:
- Essential: If you would like to act as the leader of the investigation into your case, AMLBot will provide general recommendations and a detailed trace report.
- Standard: A cybersecurity expert will individually manage your case, providing in-depth guidance, a trace report, assistance with documentation, and identification services.
- Premium: If you require assistance in every stage of the case, the AMLBot experts can provide full-scale crypto asset tracing and recovery services.
No matter what plan you select, AMLBot will provide you with high-quality, personalized support as you work to recover from a crypto scam.
Trust the Experts to Reclaim Crypto
Though it seems ridiculous, crypto recovery in and of itself has become a source of scams. Illegitimate companies claim to have the power of refunding your lost currency only to manipulate you into further losses. When it comes to protecting and reclaiming your cryptocurrency, it's important to seek out legitimate companies and to feel empowered to involve the authorities. Any crypto recovery service that discourages you from notifying the authorities is unlikely to have your best interests at heart.
The crypto experts at AMLBot offer crypto refunding assistance that coincides with rather than replaces a law enforcement response. Contact us to begin your investigation and to learn more about how our investigations can help put you on the path to reclaiming your crypto.