The schemes are socially-engineered and trust-enabled, usually beginning with a romance or confidence scam and evolving into cryptocurrency investment fraud. Criminals use fictitious identities to develop relationships and build rapport with victims. Criminals target victims using dating applications (apps), social media platforms, professional networking sites, or encrypted messaging apps.
Once trust is established with victims, criminals introduce the topic of cryptocurrency and claim to have expertise, or an affiliation with experts, who can help potential investors achieve financial success. Criminals then convince victims to use fraudulent websites or apps, controlled by the criminals, to invest in cryptocurrency. Criminals coach victims through the investment process, show them fake profits, and encourage victims to invest more. When victims attempt to withdraw their money, they are told they need to pay a fee or taxes. Victims are unable to get their money back, even if they pay the imposed fees or taxes.
Newer iterations of the schemes include liquidity mining and play-to-earn schemes.
The FBI requests victims report these types of fraudulent or suspicious activities to the FBI IC3 at www.ic3.gov.
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Source: Alert Number I-031423-PSA
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