Cryptocurrency Fraud and Scams - Red Flags
Signs and Red Flags of Cryptocurrency Scams
Cryptocurrency scams have become incredibly common in recent years. Known as "Pig Butchering", these long term investment scams attempt to steal as much money from their victims as possible.
These scams will typically begin with an unsolicted text message. The message will ask a question to the individual to ilicit a response. It is recommonded to not reply to these messages. If the individual responds, the fraudster will attempt to build trust, and will begin asking and sharing personal information. Over time, the fraudster will eventually build enough trust to mention that they have a cryptocurrency investing opportunity. The fraudster will attempt to get the individual to invest into this platform. If they do, they will be instructed to purchase cryptocurrency from a regulated exchange in Canada or the U.S. They will then transfer this cryptocurrency into an address in the possession of the fraudster, which was represented to be a cryptocurrency platform. The fraudster will attempt to receive further transactions from the victim, and will likely misrepresent "profit" in this platform to induce these future transfers. The fraudsters will get as much as possible until there is nothing left.
When the victim wants to withdraw their funds, the fraudsters will attempt to get even more money by representing that "capital gains taxes", "international trading fees", or other similar fees need to be paid prior to the withdrawal.
Once the victim realizes that they have been scammed, individuals known as "recovery experts" will begin contacting the victim, stating that they can recover their stolen funds. Once again, there will be a fee attached with this. It is important to know that "chargebacks" do not exist in cryptocurrency transactions. If anyone contacts you claiming that they can guarantee recovery of your stolen cryptocurrency - this is a scam.
Major Red Flags of Pig Butchering:
- Unsolicited text messages
- Pressure to invest in cryptocurrency
- Requirement to purchase cryptocurrency at exchange and then transfer to the investent platform
- Pressure for additional deposits
- High represented "profit"
- Fees for "captial gains", "international trading", or "withdrawals", which are to be paid in cryptocurrency
- Individuals claiming they can "chargeback" stolen funds, or that stolen funds are in a wallet with the victim's name
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