Today, millions of crypto investors have had their real money stolen in massive numbers due to some high-net crypto scams. In 2018, crimes involving cryptocurrencies cost $1.7 billion. Criminals use both conventional and innovative methods to scam their targets in fraud schemes based on digital currency transferred through online databases known as blockchains.

My research into blockchain, cryptocurrencies, and cybercrime has led me to the conclusion that some cryptocurrency scammers employ tried-and-true Ponzi schemes, in which funds from new investors are used to reward funds from earlier investors.

Some use software that interacts with Telegram, a popular internet-based instant messaging service used by cryptocurrency aficionados. Others use highly automated and intricate processes for their planned crypto scams. Even when the concept is sound, con artists can manipulate a currency’s market price.

Over the weekend, a verified account posing as FTX founder SBF posted dozens of copies of this deepfake video offering FTX users “compensation for the loss” in a phishing scam designed to drain their crypto wallets pic.twitter.com/3KoAPRJsya

— Jason Koebler (@jason_koebler) November 21, 2022

But a more fundamental question arises: What first attracts unsuspecting investors to crypto scams?

Quick-witted con artists

Some cryptocurrency con artists rely on people’s avarice by making huge return promises. For instance, an unnamed company organization runs a fraud bot and a Ponzi scheme for Bitcoin and Litecoin called iCenter. Despite without providing investment advice, it somehow guarantees clients daily profits of 1.2 percent.

A Telegram group chat is used by the iCenter system. Everything starts with a small group of con artists who participate in the scam. They are given a referral code, which they share with others via blogs and social media in an effort to entice others to participate in the conversation. The original con artists there leave the newcomers with words of encouragement and excitement. Some novices are provided a personal bitcoin wallet where they can deposit bitcoins should they decide to invest. They agree to hold off on making a significant return for a predetermined period of time, such as 99 or 120 days.

During that period, the newcomers regularly publish their own referral codes on social media to share with friends and connections, which draws additional individuals to the group chat and the investment program. Actually, the money isn’t put into any ethical business ventures. The cycle therefore continues, with earlier participants receiving payouts from each round of younger investors. Instead, a portion of the additional funds is given to the person who recruited the new employees.

Some users go over and above in their efforts to attract new users, releasing instructional films and pictures of themselves holding large sums of cash as recruitment incentives.

More falsehoods than facts

A few con artists are blatantly dishonest. Investors were scammed out of $3.8 billion by OneCoin’s designers, who led them to believe their fake coin was real. Other con games concentrate on impressing potential victims with technical jargon or claims of subject-matter expertise. The scammers behind Global Trading claimed to have made money through arbitrage, which is the process of buying cheaply and selling more expensively by profiting from price differences across many bitcoin exchanges. Investors’ money was merely stolen by them.

Investors who messaged Global Trading’s Telegram bot to inquire about their account balance could receive false information in response; in some circumstances, balances even jumped by 1% in a single hour. Who could blame them for telling their friends and family about the scam on social media when the payouts were so good?

Also, read – What Are Rug Pulls? Are They A Scam Or Crime?

Utilizing close friends and family as leverage

Social media assists crypto scams in continuing once they’ve started, at least momentarily. After falling for the promise of substantial returns on bitcoin investments, one person informs friends and family.

Sometimes famous people take part. To promote his book “Cryptocurrency for Beginners,” the alleged mastermind of GainBitcoin and other frauds in India convinced a number of Bollywood celebs to help out. He even referred to himself as a “cryptocurrency master” in an effort to gain attention while in charge of projects that cost investors between $769 million and $2 billion.

Not all well-known individuals are conscious of their engagement. A video that purported to show Dwayne “The Rock” Johnson praising the business while holding a sign with the business’s logo was posted on one of iCenter’s blogs. Videos of Justin Timberlake and Christopher Walken were falsely edited to make it appear as though they were also endorsing iCenter. That Dwayne “The Rock” Johnson opposes this bitcoin scam should go without saying.

Fraudulent initial coin offers

A typical scam technique is an “initial coin offering.” Initial coin offerings, or ICOs, are essentially a way for a new cryptocurrency business to solicit funding from prospective clients: Customers who send them active cryptocurrencies like bitcoin and ethereum are promised a discount on the new digital currency.

Initial coin offerings (ICOs) have repeatedly been exposed as crypto scams, with the offenders engaging in cunning plans, leasing up fictitious offices, and even creating pricey-looking promotional materials. An enormous wave of initial coin offering fraud was fueled in part by the optimism and media coverage around cryptocurrencies in 2017. In 2018, there were almost 1,000 unsuccessful initial coin offerings, costing investors at least $100 million. Many of these projects lacked unique ideas; more than 15% of them copied supporting materials or outright duplicated ideas from other cryptocurrency projects.

Investors looking to make money in the new technology industry continue to be interested in cryptocurrencies and blockchains, but they should be aware that these are complex systems that even those selling them do not fully understand. Newcomers and seeming experts have both been duped by con artists. Prospective investors should proceed with great caution in a market like the one for cryptocurrencies right now when deciding what to invest in and with whom. They should also think hard about their true plan for making money without lying to anyone.