Category: Scams

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Crime Crypto News Cryptocurrencies Scams

Crypto Romance Scams Cost Americans $133 Million in the First Half of 2021

Americans are increasingly falling into the tender trap of online romance scams, backed by figures for the first half of 2021. From January 1 to July 31, the FBI logged over 1,800 complaints related to romantic deceptions resulting in personal losses of approximately US$133,400,000, much of it in cryptocurrency.

Nationwide in 2020, only 23,768 complaints categorised as romance scams were reported to the FBI, though even that figure was 4,295 higher than the previous year. The obvious exponential increase in complaints in a mere six-month period has spurred the FBI into publishing a guide for potential victims to guard against the practice.

The scammer’s initial contact is typically made via dating apps and other social media sites, the FBI warns. Having gained the victim’s trust via the cultivation of an online relationship, the scammer may then claim inside knowledge of lucrative cryptocurrency investment or trading opportunities on the pretext of “building a future together”.

The scammer next directs the victim to a fraudulent website or investment application. The victim invests on the platform and returns a small profit predetermined by the scammer.

Hook, Line, Lure and Sinker

This practice invariably escalates to larger amounts of money as the scammer presses for urgency. When the victim is ready to withdraw funds again, the scammer invents reasons why this cannot happen. Additional taxes or fees need to be paid, or the minimum account balance has not been met to allow a withdrawal.

This usually encourages the victim to provide additional funds. Sometimes, a “customer service group” gets involved, also part of the scam. Victims are soon unable to withdraw any money at all, and the scammer(s) most often cut off contact with the victim and are never heard from again.

Tips to Prevent Online Eclipses of the Heart (and Wallet)

While many of these cautionary recommendations are No-Brainers 101, it may pay to keep them in mind:

  • Never send money, trade, or invest per the advice of someone you have solely met online.
  • Do not disclose your current financial status to unknown and untrusted individuals.
  • Do not provide your banking information, Medicare number, copies of your identification or passport, or any other sensitive information to anyone online or to a site you do not know for sure is legitimate.
  • If an online investment or trading site is promoting profits too good to be true, it’s most likely they’re false.
  • Be cautious of individuals who claim to have exclusive investment opportunities and urge you to act fast.

Like Americans, Australians are losing record amounts to scams of various kinds. According to an August report from the Australian Competition and Consumer Commission, Aussies lost over A$70 million during the first half of this year and more than half of that number was attributed to cryptocurrency investment scams. The top crypto-related scams in Australia, according to the report, were investment scams, followed by romance scams and personal identity mining.

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Bitcoin Hackers Scams

Bitcoin.org Hacked and Promotes ‘Double Your Bitcoin’ Scam

Educational content platform Bitcoin.org has suffered a security breach and ended up in the hands of unidentified attackers who started promoting a shady bitcoin scam on the homepage.

On September 23, several users reported that the Bitcoin.org homepage was displaying a pop-up window requesting users to send BTC to a specific address and receive twice the amount in return. This, of course, rang alarm bells in the crypto community and Bitcoin.org soon announced via Twitter that the site had been compromised.

Bitcoin.org subpages were limited as result of the attack, which did not allow users to scroll through the page and precluded access to the PDF version of the Bitcoin whitepaper. While the site is now virtually up and running again, the URL to the whitepaper displays a “this site can’t be reached” message.

The address displayed on the site received 0.4 BTC (around US$17,000) in a few hours. It’s unknown if those funds belong to any victim who fell for the scam.

Not the First Bitcoin.org Attack

This is not the first time Bitcoin.org has been attacked. Early this year, Crypto News Australia reported that the site had been hit by a DDoS (Denial Of Service) attack. This happened shortly after Bitcoin.org lost a legal battle against self-proclaimed Bitcoin creator Craig Wright, who requested that a British court force the organisation to remove the BTC whitepaper for UK visitors.

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Australia Crypto News Illegal Scams

Aussie Wunderkind Sentenced to 7 Years for Crypto Ponzi Scheme

Stefan He Qin, the Australian man who pleaded guilty to securities fraud totalling more than US$50 million, has been sentenced in a New York District Court to seven and a half years in prison.

On September 15, the 24-year-old from Canberra who cheated investors in his cryptocurrency fund told the sentencing judge he was “absolutely heartbroken” about the pain and suffering he had caused his victims.

I feel ashamed to even look them in the eye and tell them I am sorry, but I must … I know now that the world is not a video game. I deserve the punishment that [I have received] today. I will spend the rest of my life trying to make up for the pain I’ve caused. I am so, so, so sorry.

Stefan He Qin

No Sympathy From Sentencing Judge

From 2017 to 2020, Qin operated a brazen and wide-ranging Ponzi scheme that took US$54 million out of the pockets of investors. Qin, a University of NSW dropout, admitted he carried out his scheme while he owned and controlled two Manhattan-based cryptocurrency investment funds.

As the owner of Virgil Capital LLC, Qin attempted to funnel money from his second company, VQR Multistrategy, to pay investors of the Virgil Sigma Fund. After years of reckless spending – including the purchase of a Manhattan penthouse apartment – and risky investment, much of the money was gone.

Sentencing judge Valerie Caproni had no sympathy for Qin.

If he’s charming me the way he charmed his victims, he’s a real danger because he thinks his needs are more important than everyone else’s.

Judge Valerie Caproni

Quin pleaded guilty in February and was ordered to forfeit US$54.7 million.

Crypto Scams on the Rise During Pandemic

Fraudsters all over the world are taking advantage of the ongoing uncertainty that the pandemic has brought and financial scams are on the rise.

One cannot help but see the similarity of this case to the Mirror Trading International (MTI) scam perpetrated by South African Johann Steynberg.

Categories
Crypto News Litecoin Retail Scams

Fake News Alert: Litecoin Surges on Walmart Adoption Hoax

We can now officially add “fake news” to a growing list of crypto scams after a bogus press release went out on September 13 claiming that US retail giant Walmart was partnering with Litecoin (LTC) to accept payments in the cryptocurrency.

The press release, published by US agency globenewswire.com, purported to be connected to “Walmart Inc”. Several mainstream media outlets including Reuters, Bloomberg and CNBC ran with it, inflating the value of Litecoin by 28.9 percent over 24 hours. Those gains were erased once it was established the news was false.

Several cryptocurrency influencers had already tweeted that the announcement was fake. One of them discovered that the URL “WALMART-CORP.COM” had been registered just last month. It was contained in the email quoted in the globenewswire.com press release and did not lead to an official website.

Whoever created the fake release most likely disposed of a significant quantity of LTC as traders swallowed the hype, meaning investors became unwitting victims of a simple pump-and-dump.

We promptly withdrew the press release and issued a Notice to Disregard. This has never happened before and we have already put in place enhanced authentication steps to prevent [it] from occurring in the future. We will work with the appropriate authorities to request – and facilitate – a full investigation, including into any criminal activity associated with this matter.

Statement from globenewswire.com

SEC Likely to Launch Investigation

The involvement of a publicly traded company means the SEC is also likely to launch an investigation. The regulator has repeatedly prosecuted those who try to use fake news to manipulate financial markets.

The Litecoin Foundation may also be partly to blame, as it retweeted the press release from its own account. But according to foundation head and Litecoin creator Charlie Lee, the retweet was a process error:

We have three people who have access to the [Litecoin] Twitter account. The person on duty saw the news on globenewswire.com and … retweeted it, and 10 minutes later he saw that it was fake and we deleted it. It’s unfortunate. We’ll definitely be more careful in the future … but I think the story blew up before we tweeted it.

Charlie Lee, Litecoin creator/foundation head
@emilychangtv grills Litecoin’s Charlie Lee about the fake Walmart press release.
Categories
Crypto News Ethereum Scams Tether TRON

14 Arrests Made Following $5 Million Crypto Investment Scam

An old-fashioned honey trap has led to more than 100 victims becoming ensnared in a crypto investment scam that relieved them of almost US$5.5 million over the past 12 months.

Taiwan’s Criminal Investigation Bureau (CIB) arrested 14 suspects on charges of fraud, money laundering and breaches of the country’s Organised Crime Prevention Act, the Tapei Times reported on September 6.

Kuo Yu-chih, the CIB investigator in charge of the case, has revealed that the scheme focused on Ethereum, Tronix and Tether. The ringleader, known only as Chen, fronted the Taipei-based Azure Crypto Company, which offered cryptocurrency and other investment services.

Meet Attractive Ladies Online and Kiss Off Your Crypto

Chen promoted crypto investments on social media, promising high returns. His modus operandi was to lure unsuspecting victims to websites where they were persuaded to invest via interactions with attractive women. Investigator Kuo Yu-chih summarised Chen’s MO:

Chen and his staff allegedly used photographs of pretty women to attract mainly male victims, many of whom were in retirement with substantial savings.

Kuo Yu-chih, chief investigator, Taipei CIB

Chen and his staff claimed to be financial advisers specialising in cryptocurrency mining. The CIB seized ledgers containing the details of more than 100 people who invested in the scheme.

The amount of US$5.41 million lost in Taiwan’s crypto honey trap is small beer compared to the US$119 million rip-off of investors in a Turkish Dogecoin mining scam, as reported by Crypto News Australia last month, but it serves as yet another reminder to be on guard. In 2020 alone, Australians lost A$26 million to scammers, and incidences of online shysterism are only multiplying as the worldwide take-up of crypto investment continues apace.

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Blockchain Crypto News Ethereum NFTs Scams

Fake Banksy NFT Sells For A$465,000 Amid Suspicion the Artist’s Website Was Hacked

A British crypto art collector who paid almost half a million dollars for a non-existent NFT by graffiti artist Banksy was most likely the victim of a hacker, as it turns out.

A link to an online auction for the purported NFT was posted on a since-deleted page of the artist’s website, banksy.co.uk, a week ago. The only item on the page was a JPEG (below) of Banksy’s impression of a CryptoPunk, the NFT craze that’s already generated more than A$1.5 billion.

The artwork, evidently Banksy’s comment on the substantial carbon footprint NFTs generate, was titled “Great Redistribution of the Climate Change Disaster”.

Banksy’s purported NFT, Great Redistribution of the Climate Change Disaster.
Source: yahoonews.com

Soon after an image of the artwork was listed yesterday on the OpenSea NFT marketplace, furious bidding broke out for what people assumed was a “genuine” Banksy NFT.

100 ETH For an NFT That Never Was

The winning bid, fully 90 percent higher than any other, was made by an otherwise anonymous crypto art collector who calls himself “Pranksy”. It ran to a gobsmacking 100 ETH, or just over A$465,120, according to blockchain records.

Meanwhile, the page on Banksy’s website was quietly taken down, with no word about how it had appeared on the site in the first place. The buyer told the BBC that he suspected Banksy’s site had been hacked, and that some random scam artist put up the seemingly legitimate webpage.

No Such Thing as a Banksy NFT

Banksy’s PR team also denied that any NFT existed in the artist’s name. But in a happy ending to a bizarre story, the hacker has since refunded the 100 ETH to Pranksy’s bank account, less the transaction fee of around A$10,000.

Pranksy says he’s planning on keeping the artwork, for now at least.

The refund was totally unexpected. I think the press coverage of the hack plus the fact that I had found the hacker and followed him on Twitter may have pushed him into a refund. I feel very lucky when a lot of others in a similar situation with less reach would not have had the same outcome.

Pranksy, duped NFT art collector

Just a fortnight ago, Crypto News warned Australians about the prevalence of fake crypto trading websites. Pranksy, for one, seems to have missed the memo.

Categories
Crypto News Dogecoin Scams

Investors Lose $119 Million in Dogecoin Mining Scam

Another day, another scam in the crypto world. On this occasion, it was a bad actor that managed to rip off would-be investors in a Dogecoin mining scam, according to local media in Turkey. 

Over US$100 Million Stolen

The scammer, identified as “Turgut V”, together with his team managed to trick investors into buying DOGE and handing it over to him, thereby investing in mining technology and promising 100 percent returns. The scammers managed to steal at least US$119 million before one of the victims filed a complaint with the Chief Public Prosecutor’s Office in Küçükçekmece, a suburb of Istanbul.

Apparently, Turgut V and his team hosted in-person meetings at luxury properties and via Zoom calls trying to lure investors into pouring money into the scam, the report said, quoting the prosecuting lawyer. A court has banned Turgut V and his team from leaving the country while authorities investigate.

Companies like KeychainX could be helpful in this kind of situation. A few weeks ago, a retired US truck driver managed to retrieve 10 million DOGE thanks to KeychainX’s wallet recovery service.

Impersonation Scams and Dogecoin

Dogecoin, being one of the largest market cap tokens, has attracted massive interest from the media, especially thanks to billionaire celebrities and tech leaders like Elon Musk. Scammers usually try to take advantage of the hype to fool newcomers.

It is worth noting there was an impersonation scam that happened five months ago where a man lost A$700,000 to a fake Elon Musk Twitter account. As Crypto News reported, the man was tricked by a link under a purported tweet from Musk, sending him to an event hosted as a giveaway where people were invited to send anything from A$7,700 to to A$1.5 million.

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Bitcoin Crypto News Scams

Man Robbed of 16 Bitcoin Sues Young Thieves’ Parents

A man in the US has taken civil action against the parents of two young men in the UK for stealing 16 bitcoin (BTC) from him after the pair used clipboard-stealing malware to alter the destination of the crypto when the man tried to transfer it.

According to a civil order filed this year, in 2018 Colorado man Andrew Schober had 16.4 BTC stolen when he tried to move the digital asset from one account to another. When Schober realised the bitcoin never reached the intended account, he began to worry something had gone wrong.

After losing about 90 percent of his net wealth at the time, saved to finance a home and support his family, Schober spent over US$10,000 hiring a team of investigators to track down his lost crypto. On closer inspection of Schober’s computer, they found he had accidentally downloaded some malware after clicking a link posted on Reddit for a supposed cryptocurrency wallet application called “Electrum Atom”.

After months of investigation, the crypto was tracked to two young men in Britain who were minors at the time of the theft.

The first defendant had been found just hours after Schober’s bitcoin was stolen when he posted a message to GitHub asking for help accessing the private key corresponding to the public key of the bitcoin address used by the clipboard-stealing malware. The other defendant had the malware code that was bundled with the Electrum Atom application in his GitHub code library.

Beware Clipboard-Stealing Malware

The malware used to steal Schober’s bitcoin was bundled with a wallet program that was designed to wait for a user to copy in the lengthy wallet address. When an address is copied to the computer’s temporary clipboard, it gets swapped with another new address to which it gets sent.

How the malware scam worked. Source: Colorado Court file

Difficulty Retrieving Funds

After Schober tried to contact the young defendants’ parents for redress, there was no response. He stated that “losing that money has been financially and emotionally devastating. He [sic] might have thought he was playing a harmless joke, but it has had serious consequences for my life.”

After being met with continued silence from the parents for several months, Schober filed suit against both the young men and their parents in a Colorado court.

“These crimes can be monumentally difficult and expensive to track down,” said Mark Rasch, a former prosecutor with the US Justice Department who is now in private practice. “It’s designed to be difficult to do, but it’s also not designed to be impossible to do.”

Rasch said he was currently acting in several lawsuits involving young men who’ve been accused of stealing and laundering millions of dollars of cryptocurrency, specifically crimes involving SIM swapping.

A lot of these crimes are being committed by juveniles, and we don’t have a good juvenile justice system that’s well designed to both civilly and criminally go after kids.

Mark Rasch, attorney

It makes sense that some victims of cryptocurrency theft are spending serious money to track down perpetrators and sue them civilly.

In a related story from last year, Ledger users flagged a class-action lawsuit after having their personal information breached.

Categories
Crypto News Crypto Wallets NFTs Scams

Scam Alert: Fake OpenSea Support Staff Are Stealing Crypto and NFTs

OpenSea users are the latest victims in a phishing attack where scammers are posing as support staff in Discord to take over wallets and steal funds.

These fake support admins are targeting users who have asked for help and tricking them into giving access to their MetaMask wallet, resulting in the loss of everything in that wallet, including NFTs.

Breakdown of the OpenSea Scam

Here’s how it works. An OpenSea user in need of support requests help at OpenSea’s help centre or via the site’s Discord server. Scammers respond by sending private messages and inviting the user to a fake “OpenSea Support” server under their control (see image below).

After being walked through various troubleshooting steps, the fake OpenSea Support scammer asks the user to share their screen. They tell the victim that they need to resync their MetaMask Chrome extension with their MetaMask mobile app.

To synch your mobile MetaMask wallet with your Chrome extension, if you go to Settings > Advanced > Sync with your mobile phone, you enter your password and a QR code will be displayed. The scammer then screenshots this QR code and can sync it with the MetaMask app on their own mobile phone, without asking for your seed phrase or password (because you already entered it on your end).

Now scammers have full access to the victim’s MetaMask wallet and all the cryptocurrency and any NFT collectibles stored within it. They then transfer the user’s assets to their own wallets and there is nothing the real support staff can do to help get it back.

How to Avoid Getting Scammed

Always go through the official help desk ticket option for communicating with support staff to ensure you don’t lose all your crypto assets in your wallet to a dodgy scammer. As these scams are so popular right now, it is strongly advised that OpenSea users only open tickets through the site’s help centre and not use Discord or Twitter when seeking support.

This is a warning: never share your wallet’s recovery keys, password phrases or QR codes used for synchronising. Always be alert; if anyone direct-messages you through any platform they are most likely a scammer. Do not click on any links to an external server; this is a red flag. Real support staff will never directly message you, send you any link to click on, or ask you to share your screen or password, etc. These are all red flags. Go slowly and be careful out there, scammers are everywhere.

Scam Alert: The number of crypto scams continues to grow. Australians should be wary when dealing in crypto as phishing attacks, fake support staff, fake apps and fake sites are everywhere.

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Australia Scams

Investment Scams Increase 53% in Australia as Victims Lose Over $70 Million This Year

According to a report from the Australian Competition and Consumer Commission (ACCC), Aussies have lost over A$70 million during the first half of this year and more than half of that number is attributed to cryptocurrency investment scams.

Crypto Scams on the Rise in Australia

Scamwatch, an Australian statistics website run by the ACCC, has received at least 4,763 investment scam reports so far in 2021, a 53.4 percent increase from the 3,104 reported in the first half of 2020.

Amount lost by Australians. Source: Scamwatch Australia

The total amount lost by Australians totals A$166 million for 2021 so far, attributed to 151,000 reported scams.


Types of scams in Australia. Source: Scamwatch Australia

Cryptocurrencies were the most used payment method to deceive Aussies and caused the biggest losses. Of the 1,931 reports, 955 (49.5 percent) were due to cryptocurrency losses amounting to A$29,277,896, with bitcoin accounting for more than A$25 million of that amount.

Investment scams are more prevalent than ever, and scammers are capitalising on interest in cryptocurrency in particular. More than half of the $70 million in losses were to cryptocurrency, especially through bitcoin, and cryptocurrency scams were also the most commonly reported type of investment scam, with 2,240 reports.

ACCC deputy chair Delia Rickard

Recent Crypto Trading Scams

One the most common scams highlighted by the ACCC is fake crypto trading platforms, something that has become a lucrative business for scammers.

As previously reported by Crypto News Australia, the number of fake crypto trading sites has been growing in Australia as scammers have been designing highly detailed websites posing as crypto exchanges and targeting victims via email or Telegram.

Be wary of investment opportunities with low risk and high returns. If something sounds too good to be true, it probably is.

ACCC Deputy Chair Delia Rickard

Bitcoin accounted for the most used cryptocurrency regarding investment scams, with A$26 million losses this year compared to A$17.8 million in 2020, a 44 percent increase.

Australians are losing record amounts thanks to the numerous scams going around. Currently, the top crypto scams in Australia are investment scams, romance scams, personal identity mining and illegal crypto mining.