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Crypto Scams Exceed $1 Billion Mark in Past Year

Crypto Scams Exceed $1 Billion Mark in Past Year

We’ve all heard of the dangers of crypto scams, and there are numbers to justify caution. According to the FTC, 64,000 people in the United States alone lost $1 billion between 2021 and 2022. Currently, 25% of all fraud is cryptocurrency-related, and crypto scams are 60 times higher than they were in 2018, as reported by the Washington Post. 

As staggering as these numbers are, they are most likely only a fraction of the real crypto crime numbers, since many victims don’t report these frauds and law enforcement agencies and police departments are struggling with the sheer number of complaints while trying to upgrade their cyber crime services. 

Losing It All on Fake Crypto Trading

Topping the list of types of crypto fraud are fake trading deals, often advertised on social media. These frauds are intended to appeal to desperate people who need extra money to cover rent, bills and day-to-day expenses. The fact that Americans are not able to save money and are working multiple low-wage jobs in the gig economy creates a perfect target for these quick trading scams. In the end, these deals are nothing more than a way for criminals to line their bitcoin wallets. 

Social Media – Be Careful Who You Meet

Social media is crypto scam central. It’s easy to set up a fake identity on Facebook and Instragram and reach an instant audience. The scams will create an attractive quick crypto trade with promises of huge returns. Not only do the returns never materialize, but victims lose their principal.

If victims manage to track down the scammers, the people behind the scheme will blame the volatility of cryptocurrency and say the money was simply lost in a high-risk trade, when victims’ funds aren’t lost at all but are sitting in their anonymous bitcoin wallets. 

Crypto Ponzi Schemes – The Next Generation Bernie Madoff

Some crypto scams intend to attract would-be investors for the longer term and pretend to be legitimate brokers. They may have a website that offers trading services along with promises of specific rates of return. They may have no licensing information or could be faking a license, passing themselves off as a regulated broker. 

Many of these longer-term crypto trading operations are Ponzi schemes, which fund the few withdrawals they give with deposits from new clients. Victims are lured into a false sense of security with the one or two small withdrawals they receive until the Ponzi scheme closes shop suddenly with the rest of their funds. 

Is It Really Better to Have Loved and Lost? Not with Romance Crypto Scams

Romance scams are big business for crypto scammers, since many people are looking for love online. According to a Stanford University study, 39% of people met their romantic partners online. Of course, crypto schemes capitalize on this by chatting up would-be romantic partners only to ask them for a loan in crypto currency or entice them with a fake crypto trading deal. 

Despite frequent PSAs online to avoid giving money to strangers on social media, the FTC reports that $185 million was lost in 2021 to romance scams. These aren’t just individuals, but can be huge operations with many people working for the scam, reaching out to strangers on social media. A single romance scam operation took $66 million from thousands of victims. 

What Can You Do About Bitcoin Fraud? 

If you’ve lost money to a crypto scam you are in good company–people from all walks of life are being robbed. It’s important to take action and try to find your lost funds. How? Kointrail forensic services investigate bitcoin transactions and to identify the crypto wallet where your funds are hidden. 

Have you lost money to a Crypto Scam? Need to find your lost funds on the Blockchain? Kointrail Is the Solution!

Don’t wait, but get started with Kointrail. Our advanced, self-directed crypto forensic services will pinpoint crypto transactions and identify who is holding your cryptocurrency. Our investigation reports guide official investigations and are the key to getting law enforcement to pursue your claim. Get started with Kointrail today!

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Five Top Crypto Scams in the First Half of 2022

Five Top Crypto Scams in the First Half of 2022

Most people realize that cryptocurrency involves significant risks. We’ve witnessed a recent spectacular dive in bitcoin price. In addition to volatility of digital currencies, the number of crypto scams continues to grow, robbing consumers of billions of dollars already in 2022 so far. 

Looking at the cryptocurrency market at the mid-year point, it’s clear that 2022 has been a wild ride for digital currencies. The rapid rise and fall of cryptocurrencies has been an obsession of the financial press. However, even if digital currencies held their value and were steady investments, crypto frauds would still be a major problem. 

Why Are There So Many Crypto Frauds?

One reason for the large number of crypto frauds is that digital currencies are still new. Most consumers aren’t really sure how cryptocurrencies or the blockchain work, but they don’t want to miss out on a financial opportunity. They may leap before they look and buy and trade cryptocurrencies without knowing how to be careful. 

Another reason for the proliferation of crypto frauds is the ease of hiding in the blockchain. Meanwhile, law enforcement and other authorities still need to upgrade their cyber crime departments to deal with the crisis. 

Cyber criminals think they can conceal their activities using the anonymity of the blockchain as a cover. Even though KoinTrail can find them, the assumption that the blockchain is the Wild, Wild West without a sheriff inspires many fraudsters. 

What Are the Top Crypto Scams So Far in 2022? 

Although any type of fraud, with the addition of crypto transactions, can be transformed into a crypto scam, the following top the list of most common types. 

  • Fake Crypto Investments

It’s amazing how easy it is for an unlicensed individual or group of cyber criminals to call themselves brokers and advertise their crypto trading services. Equally amazing is how quickly people are willing to part with their money on the faith that an unregulated entity is legitimate and can generate returns on their investment. These operations either offer crypto trading or demand that accounts are funded only with cryptocurrency. Either way, people who hope to trade with them not only see no returns, but lose their principal. 

  • Rug Pull Scams

Rug pull scams are exactly what they sound like–they promise something crypto-related and then pull the rug from under victims at the last minute. A more vivid image may be Lucy pulling the football from Charlie Brown when he attempts to kick it, but the principle is the same. 

The most famous example of the rug pull scam was the Squid Game crypto deal. Participants bought tokens to play games that would award them more tokens if they won. They were told they could trade these tokens in for cryptocurrency. Suddenly, the operation stopped and the tokens were worthless. Players were left with only the tokens and the scam made off with their money. 

  • Social Media Crypto Scams

Social media is ground zero for crypto scams. It’s easier to masquerade as another person on Facebook or Instagram and to disappear without an official website. Recently, Richard Branson has complained that his name, image and brand is being used to push fake crypto deals and he cautions people to ignore anything being marketed in his name, except his own products. 

Scammers on social media aren’t just using celebrity names and photos, but meet people for friendship and romance only to ask them for a loan in cryptocurrencies or offer a fake trading deal. Be careful who you deal with on social media, and don’t give them any money! 

  • Phishing Scams

Phishing is any attempt to take sensitive information from someone else under false pretenses. People do this either stealthily, which is known as hacking or by getting or “phishing” the information from the person with their knowledge. In crypto phishing scams, someone pretending to be a broker, an organization or a merchant will ask for sensitive data, including crypto codes or crypto wallet information only to rob you of your cryptocurrency. 

  • Fake Crypto Exchanges

You wouldn’t put your money in the bank without finding out if it is actually regulated and a legitimate entity. That’s why people often like working with banks that have been around for a while and have a solid reputation. Crypto is relatively new, and no exchanges have been around for decades, but stil, it’s important to research an exchange well before using it. Often, you are safer dealing with familiar exchanges and those that are regulated rather than taking a chance on something brand new but without a license. 

Have you lost money to a Crypto Scam? Kointrail Is the Solution!

Don’t wait, but get started with Kointrail. Our advanced, self-directed crypto forensic services will pinpoint crypto transactions and identify who is holding your cryptocurrency. Our investigation reports guide official investigations and are the key to getting law enforcement to pursue your claim. Get started with Kointrail today!

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Richard Branson Warns Crypto Frauds to Stop Using His Name

Richard Branson Warns Crypto Frauds to Stop Using His Name

Richard Branson, billionaire entrepreneur and influential founder of Virgin Atlantic is warning crypto frauds to stop using his name in vain. Although Richard Branson has recommended bitcoin investment, he feels the situation has gotten out of control with fake endorsements featuring him apparently pushing crypto trading deals. 

Branson has a reputation for being forward-looking and willing to embrace innovation. However, the entrepreneur draws a firm line in the sand when it comes to using his name without permission in fake crypto ads claiming he endorses everything from phony initial coin offerings to short-term crypto trading deals. 

Why Doesn’t Branson Just Sue? 

Why doesn’t Branson simply file a lawsuit against those responsible? The problem is two-fold. First, it’s impossible to sue people if you don’t know who they are. Crypto scams are able to conceal their identities behind aliases and manufactured company names and images on social media. 

Second, the sheer number of crypto scams using fake celebrity endorsements ensures that fighting the battle on a large scale would be like chopping of ever-growing hydra’s heads. 

Should We Hold Social Media Platforms Responsible? 

Branson and British legislators are finding a remedy for this problem by proposals to amend the UK’s Online Safety Bill to include provisions that would hold social media platforms and crypto exchanges responsible for scams that operate on their sites. 

In fact, Branson recently had a word with outgoing Facebook/Meta COO Sheryl Sandberg that the social media site should be taking more action against all types of crypto frauds, including celebrity imposter crypto scams on the platform. This also means cracking down on paid ads by suspected cyber criminals. 

In the meantime, the Virgin Atlantic founder has urged consumers to use caution when clicking on anything using his name or image to promote it. This goes for other celebrity endorsements that may also be fake. However, Branson emphasized that his view of bitcoin may be worth buying on the current dip in value as just a single-digit percentage of one’s portfolio. He also is open to accepting bitcoin as payment for certain products and services. 

What Can Be Done ABout Crypto Schemes? 

One of the biggest obstacles for dealing with the sheer scale of cryptocurrency scams is to uncover the identities of cyber criminals who hold anonymous bitcoin wallets with stolen funds. That’s one reason Branson and others have had to put the pressure on social media companies rather than trying to go after the culprits directly. 

However, the good news is that methods for fighting crypto crime are always evolving. KoinTrail is at the forefront of crypto forensic investigation methods and you can benefit from our cutting-edge technology and tested methods to find your funds on the blockchain. 

Have you lost money to a Crypto Scam? Kointrail Is the Solution!

Don’t wait, but get started with Kointrail. Our advanced, self-directed crypto forensic services will pinpoint crypto transactions and identify who is holding your cryptocurrency. Our investigation reports guide official investigations and are the key to getting law enforcement to pursue your claim. Get started with Kointrail today!

40 billion dollars in cryptocurrency scams this year alone!

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