Silver Law Group is a national investment fraud law firm with significant experience helping crypto investors recover losses due to fraud through federal court litigation, finra arbitration and SEC whistleblower claims.
Whatever method they use to convince you, the investor, to give them money, the result is the same: your money has likely been stolen by someone disguising their identity.
Crypto Fraudsters Master Social Media
Have you ever received a text from a number you don’t recognize? Maybe it’s a “wrong number,” or an “accidental” contact. Unless you can verify the number and the caller, the best way to respond is to block and delete the number.
People you don’t recognize in your DMs (direct messages) should always be considered suspicious unless you can vet or confirm the sender. Are they friends of one of your friends, or just a random person who sent you a note? If you don’t know who they are, deleting the message without opening it can be the best option.
However, you may decide to pursue an online friendship or romantic relationship with this individual. Always be on guard with someone you don’t know or someone you just met. Once they’ve gained your trust, they begin to discuss investing in some type of cryptocurrency scheme. They may claim to “know someone with inside information,” or have a “relative” in the business.
Even if these conversations begin on Facebook, Instagram, or WhatsApp, many fraudsters ask you to move the conversation to a newer messenger platform called Telegram. Its appeal is that it is anonymous, encrypted, and much more difficult to track. The very aspects that make it suitable for private personal communication also leave it open for abuse. Scammers can be located anywhere in the world, and know that there are people who will respond, especially if they claim to be a “friend of a friend.”
The SEC strongly urges investors not to invest based solely from advice received from a source either through an app, from social media, or other non-personal contact. Also: do not share any personal information with them, such as banking or brokerage information, your Social Security number, tax forms, credit cards, your DOB, driver’s license, or any other important data.
Bitcoin And Other Online Payments
Another important point is that fraudsters like to deal with Bitcoin or other cryptocurrency. Fraudsters frequently ask people to pay in Bitcoin, or through a cryptocurrency platform to make deposits for an investment. Is it legitimate? Probably not. And because not many people understand cryptocurrencies, it’s easy to sound
Bitcoin ATMS are simply a way to convert cash into Bitcoin and aren’t illegal by themselves. But fraudsters also convince individuals to deposit money into a crypto wallet. Once the money is deposited, it is likely unretrievable. Chances are if you’re asked to go to a Bitcoin ATM, it’s a scam.
Cloned Social Media Accounts
What if you receive a new friend request from someone you’re already connected to on social media? Contact them directly and ask if they have a second Facebook, Instagram, or other social media account. Sometimes people do set up “backup” social media accounts, but often, someone else has created a new cloned account, and contacts your friends once they accept.
The cloned account looks much the same as the real one, with pictures and even a few friends already connected. The pictures are swiped from the original one, and a few posts added to give an air of legitimacy. Once you’re convinced, they begin a conversation with you to eventually convince you to send them money.
Double Danger: AI (Artificial Intelligence)
Scammers and fraudsters exploit the newest technology to harm, deceive, and defraud others. AI is no exception. From ChatGPT to Microsoft Copilot and countless other tools, AI can be quickly harnessed to create web pages, videos, documents, and other digital assets easily.
While AI has been around for many years, it’s now highly accessible to anyone with an Internet connection. It’s now a two-fold way to scam someone: a scammer can utilize AI to create so-called “deepfakes” of speech, video, audio, images, and more, to convince their victims that something is real.
Additionally, scammers may use the hype surrounding AI to promote an “investment” into “emerging AI technologies” to sound legitimate. By leveraging the popularity of AI, scammers know that they can say enough to get someone interested but not understand enough to realize the fraud. Many will claim to use AI in their trading to get better or “guaranteed” returns. Anyone selling securities in the US must be registered with the SEC, but fraudsters are not.
Added Fees And Costs
One indicator of a fraud is a request for additional funds to withdraw your money, known as “advance fee fraud.” You may also be told that your account has been “frozen” by a regulator, and you’ll need to send extra money to release your account. Alternately, they may state that they’ve “accidentally” put money into your account and ask you to reimburse them. However, the plan is for you to keep sending money, and you will not receive any “dividends.”
Secondary Fraud
If you’ve already been a victim of a crypto scam, you may be targeted for a second time by someone offering to help you recover what you’ve already lost. You may be asked to submit additional funds (possibly into crypto assets) or send them the private key to access your crypto account. In reality, they are simply targeting you again and you will lose more money.
Mimicking And Exploiting Trusted And Legitimate Sources
With spoofing technology widely available, you may answer a call you believe is from the SEC or another federal agency or receive an email that looks legitimate. AI technology greatly improves their ability to recreate emails, audio or video that comes from someone you trust. The sense of urgency is so that you do not have time to make a rational decision. You won’t know until after you send money that you will not get back.
The entire SEC press release is available online at Investor.gov.
Did You Invest In An Online Crypto Scheme?
Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingent fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today at (800) 975-4345 and let us know how we can help.