Oregon’s Division of Financial Regulation (DFR) has warned digital currency investors to do their due diligence before investing in any scheme, given the high spate of fraud plaguing the industry.
The financial watchdog disclosed the warning on its official website, listing some of the tactics employed by scammers. One such measure is the re-victimization of FTX’s users with the ploy of recovering lost assets for the defunct platform’s users.
The scammers bait their victims using a website that appears to be run by the U.S. Department of State, claiming that they will be able to return the assets of users. In reality, the scammers obtain sensitive details from victims, which they use to gain control of other digital wallets or ask users to pay a sum to fast-track the return of the assets.
“The U.S. Department of State did not create this website. Please be advised that if anyone contacts you asking for usernames and passwords for your accounts, it is more than likely a scam,” read the DFR’s warning.
Another scheme employed by digital currency scammers is using fake investment platforms that offer huge returns in a short time frame. Lured by the promise of impressive returns, victims deposit digital currency like BTC on the platforms but unknown to them, the scammers control trading details.
The DFR warns that users’ balances will rise rapidly, but they will be unable to withdraw their balances. Instead, they will be inundated with requests to deposit more funds for taxes or withdrawal fees until the victim realizes it was all a scam.
The widespread use of fake digital wallets, pump-and-dump schemes, and multi-level marketing platforms has spiked in recent months. TK Keen, head of the DFR, warned that investors should be on their guard at all times when dabbling in digital assets on the grounds that the “market is fluid and full of people trying to take advantage of you.”
End of the year chaos for regulators
In 2022, regulators had to deal with increased activity levels from digital asset scammers worldwide. California’s Department of Financial Protection and Innovation (DFPI) released 17 public warnings against shady digital asset entities.
The FBI also warned American residents of a spike in pig butchering scams during the holidays targeted at older persons. According to the warning, the scammers feign a romantic interest in the victims before persuading them to invest in sham investment sites.
On the other side of the world, South Korean investigators are working around the clock, securing the conviction of six top-level executives of the scam V Global exchange, while France flagged down two digital trading platforms for the first time in 2022.
Watch: The BSV Global Blockchain Convention panel, Blockchain for Government Data & Applications
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.