How are cryptocurrencies used in scams?
Criminals trying to scam you by using cryptocurrencies as bait can impersonate financial advisers, company representatives or celebrities. They even go as far as creating fake social media profiles or bogus dating profiles. They use social engineering techniques to weave an investment web through which they try to show that they are completely legal and legitimate. Their goal is for you to use your money to buy cryptocurrencies and then have you transfer the crypto to them – or handover control – under the guise of helping you multiply your investment. Since another feature of these virtual assets is payment anonymity — once the transaction is complete, it’s virtually impossible to trace the funds and recover the money.
We’ll use an example to tell you how one of the most used scam techniques works: Natalia loves music. While browsing online one day, she finds an ad by her favourite artist where they supposedly recommend an investment in a cryptocurrency. This grabs her attention and she decides to click on the ad link. She’s then redirected to another website where she must enter her personal details to receive more information. This website was designed by a cybercriminal to appear genuine and not raise suspicions.
After providing her details, the scammer contacts Natalia by phone (but she could also just as well be contacted through social media, text messages, email, etc.). The scammer impersonates a financial adviser to offer her high returns by investing in said cryptocurrency. In some cases, the criminals typically use sales tactics to pressure victims to complete the transaction there and then.
Because Natalia doesn’t have much understanding on how digital assets work, the investment seems like a good idea to her and she accepts. Next, the scammer asks her to download and install a software program onto her personal computer and, without knowing, Natalia gave the scammer access to her computer. When she starts to deposit her money into the cryptocurrency platform, the criminal blocks access to the accounts and the money invested, and makes off with the funds.
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