CryptoCurrency Scams Investment Fraud

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CryptoCurrency Scams Investment Fraud Investigations | We Can Help

What are Cryptocurrency Scams?

“Cryptocurrency scams investment fraud” often promise you can make lots of money with zero risk, and often start on social media, online dating apps and websites (romance scams), or fraudulent investment websites. These cryptocurrency scams may start with an unexpected text, email, or phone call, as well. With investment fraud scams, cryptocurrency is central in two ways: it can be both the investment, and the payment. If you read a tweet, a text, an email, or other message on social media that tells you to pay with cryptocurrency, it’s a SCAM.

We Can Help

If you have been involved in cryptocurrency scam investment fraud, we can help. Washington State Investigators has partnered with a Cyber Security Intelligence & Operations specialist, Offensive Security Certified Professional (OSCF) including KLCP, CEH, CBE, and SCXF certifications, and proven skill sets to provide our clients with highest level cyber and security investigations. We provide a proprietary custom cryptocurrency tracing guide that clients give to local or federal law enforcement. Law enforcement uses the information contained within the tracing guide to begin investigating your case.

What is a Cryptocurrency Tracing Guide?

When you have been defrauded or scammed out of your cryptocurrency investment, many victims do not know what to do next. Who do you report the crime to? Who can actually help you? Typically, law enforcement will not be able to start a cryptocurrency scam fraud investigation because they require a Tracing Guide that includes details about how the stolen funds were moved, and where the funds were transferred. This is where we can help.

We can identify the perpetrators, and locate your financial assets. Cryptocurrency tracing is an integral part of an investigation and recovery process for victims of online fraud, theft, hacking, and extortion schemes. By utilizing the latest tools in “blockchain forensics”, we are able to track and identify where your stolen assets were moved, and provide the necessary information detailing how your stolen assets got there. We provide a proprietary custom tracing guide including visual graphics that clearly outline how, and where your funds moved using easy to understand terms. In addition, our tracing guides include multiple templates that are designed specifically for law enforcement. Law enforcement will provide the tracing guide to cryptocurrency exchanges to gain access to the fraudulent wallet’s KYC (Know-Your-Customer) documentation. This typically includes the IP address of the registered account, banking information, the ID used when registering, and much more.

We can assist law enforcement during this process to ensure that all of their questions are answered. In the event that law enforcement does not respond to you in an appropriate amount of time, we can reach out to our contacts at varying levels of local and federal law enforcement to request assistance; however, this is only when absolutely necessary.

We employ Qlue, by Blockchain Intelligence Group, in addition to Maltego, CipherTrace, & custom in-house built tools to tackle a variety of scenarios. Qlue & CipherTrace are the same software platforms used by multiple governmental & law enforcement agencies around the world. We offer contact information sheets that will provide the direct link, address and phone number to every agency you need in order to submit your tracing guide report.

If our tracing does not yield the preferred resolution for you, we can offer negotiations with the bad actors responsible. This typically happens when we identify the person(s) behind the fraud, & we negotiate with the scammer(s) to return part or greater amount of your stolen funds. This is especially useful when the scammer(s) is out of the country.

In the event that you are scammed by a fraudulent exchange platform (i.e. fake crypto website or trading platform) instead of an individual, we are able to do the full comprehensive workup on that platform, in addition to tracing your currency. More than likely, you are not the first person who has been scammed or defrauded, and that gives us a much stronger case. We will pull WHOIS information, employ IP tracing, and search for exploits within the website itself, as well as several other specialized tactical measures to otherwise compromise the fraudulent website to provide us with the personal information about the individual(s) responsible.

Cryptocurrency Scams Investment Fraud

Common Types of Cryptocurrency Scams

Investments Scams

Investment scams involve a bad actor enticing people to send their cryptocurrency to the fraudster with promises of “huge gains.” Scammers can play many parts, such as an investment manager, a celebrity, or a love interest via an online dating site. Whatever role is assumed, the scammer promises to grow your investment if you transfer your cryptocurrency to them. If you follow through with their request, kiss your crypto goodbye.

Investment scams include what is called pump-and-dump schemes. A scammer entices you to buy an obscure cryptocurrency at a “low price”, with promises that the asset’s value will soon increase through the roof. When you buy, the price increases, at which point the scammer sells “their holdings” at the new higher valuation, which causes the price to decrease drastically or collapse, leaving you and any other victims underwater. Typically, the new token is only worth a few cents, or even fractions of a cent. But a little bit of momentum can drive it up the charts on websites like to make it appear like the sky’s the limit on price appreciation. Given the speed at which new coins are created, and marketed to investors on the internet without regulation, some investors looking to earn quick profits are lured in by reports of triple-digit percentage gains in the digital asset over a short period of time, and want to ride the wave.

How to spot an investment scam? Look for promises of excessive profits or zero risks.

These scams often begin on social media, or online dating apps and websites (romance scams), so be wary of anyone contacting you out of the blue about your cryptocurrency assets. Be watchful for anyone talking up a particular cryptocurrency asset on Reddit or other social media platforms, as well. These are known as “socially engineered scams”.

Phishing Scams

Phishing scams are an old favorite among scammers. Fraudsters want to access your account details, including your crypto keys. As any crypto user knows, he who holds the key, holds all the cryptocurrency.

Phishing scammers often lure you into clicking on a link to a fake website, where they can then steal your account details. They can impersonate well known companies, like Amazon or your bank, utility companies, or even government agencies, and may post links on social media or contact you directly.

For example, they might send you an email or text saying a withdrawal was initiated, and give you a link to cancel the transaction. The link directs you to a fraudulent website, and harvests the investor’s account credentials, allowing scammers to login and withdraw assets. Anyone can fall prey to a phishing scam, and any digital asset can be the target of such a scam.

Upgrade Scams

Software is constantly being updated, and cryptocurrency platforms are just a form of software. Since many have become accustomed to upgrades in the digital age, scammers can easily trick crypto holders into giving up their private keys as part of an upgrade.

Upgrade scammers can piggyback on legitimate migrations, such as the Ethereum merge, which had both the Ethereum Foundation, and Robinhood concerned enough to issue a warning that users should be on “high alert” for upgrade scams.

SIM-Swap Scams

SIM-swap scams are among the newer crypto scams taking place today. They occur when a scammer gets access to a copy of your SIM card, and can access all of your phone’s data.

That information can be used to receive, and use the two-step authentication codes required to gain access to cryptocurrency wallets, and other accounts without the victim knowing. When this happens, the victim’s cryptocurrency accounts can be hacked, and wiped out without the victim even being contacted.

Fake Crypto Exchanges and Crypto Wallets

If you browse your social media handles, you will come across websites that advertise cheap Bitcoin (BTC). They may advertise cryptocurrencies at 5% or more below market value, and promise huge savings when you buy through the site, but sometimes these platforms are fake crypto products.

These fake crypto products often quote superior returns on investment, and users are typically required to pay a high initial fee, followed by frequently being asked to invest more, and more. When you try to withdraw your crypto funds, you’ll likely find they’ve vanished.

A fake crypto wallet is a malware scam. Crypto scammers use it to infect a computer, and eventually steal the user’s private key or password. To avoid these types of scams, stick with reputable exchanges, and wallets with long user history. If a wallet’s website tries to resemble a reputable brand, you should consider it a scam and move on.

Blackmail or Extortion Cryptocurrency Scams

One of the oldest scamming approaches is blackmail or extortion scams. Typically, you receive an email that someone has compromising information about you i.e. private photos, videos, confidential data, etc. The scammers request you pay them money or they will release this private information to a public website, family, social media friends, etc.

This becomes a cryptocurrency scam when the scammer requests the payment in cryptocurrency, oftentimes because the transactions cannot be reversed. It’s best to delete these messages, and report the sender to authorities.

Employment Cryptocurrency Scams

Similar to investment or business opportunity scams, employment cryptocurrency scams often begin with an unsolicited job offer that lures victims to a fraudulent website to learn more about the opportunity. Victims are often asked to pay for training to become fully onboarded with a company. Victims asked to pay for that training in cryptocurrency, which is then never returned to them.

Warning Signs of Cryptocurrency Fraud

  • The offer seems too good to be true.
  • “Guarantees” you’ll get rich quick.
  • A website’s address bar does not begin with “HTTPS”.
  • The payment request is urgent.
  • Threatening messages.
  • Payment requested in cryptocurrency.
  • A social media user is asking you to pay for something using cryptocurrency.
  • The advertisement or post has many enthusiastic reviews.
  • Unsolicited favors asked.
  • Your account logins are requested.
  • Unsolicited job offer.
  • Online dating romance leads to request for cryptocurrency investment.
It’s important not to underestimate cryptocurrency scammers and their devious tactics.

One Last Warning of Great Importance “Young Investors are Prime Targets”

It’s no surprise that the younger digital generations have embraced cryptocurrency quicker than most. They’ve also become much more susceptible to crypto fraud. Those in the age range 20 to 49 are more than “five times more likely to lose money” to cryptocurrency scams than older age groups. What’s more, people in their 20s and 30s lose the most money to investment scams, more than half of which is in cryptocurrency losses.

We Can Help

If you have been involved in a cryptocurrency scam investment fraud, you are not alone. We invite you to call Washington State Investigators to learn more about our remedies to trace your cryptocurrency, create a custom “Trace Guide” needed to start a formal law enforcement investigation, and to assist with recovery options outlined above.

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Washington State Investigators