FBI Report: Crypto Scammers Hiding Beneath Mask of NFT Developers

UTC by Bhushan Akolkar · 3 min read
FBI Report: Crypto Scammers Hiding Beneath Mask of NFT Developers
Photo: Unsplash

Crypto scammers are trapping gullible investors by creating replica websites and social media accounts of real-life projects. Later they ask the users to connect their wallets, and siphon off the funds.

The US Federal Bureau of Investigation (FBI) has recently raised caution about cybercriminals pretending to be real NFT developers and later stealing cryptocurrencies and other digital assets from gullible investors.

Besides, the FBI also exposes fraudulent schemes wherein criminals get direct access to NFT developer social media accounts. Later, they create look-alike accounts while promoting “exclusive” new NFT releases. These scammers are leveraging misleading advertising campaigns thereby creating a sense of urgency and FOMO among users.

In its advisory provided last week, the FBI noted:

“Links provided in these announcements are phishing links directing victims to a spoofed website that appears to be a legitimate extension of a particular NFT project”.

Later, these duplicate or replica website urges users to connect their crypto wallets and purchase the NFTs. Soon as the users connect their wallets, the threat actors siphon the funds, digital assets, or NFTs to wallets that are under their control. “Contents stolen from victims’ wallets are often processed through a series of cryptocurrency mixers and exchanges to obfuscate the path and final destination of the stolen NFTs,” the agency said.

Thus, crypto users need to be extra vigilant while interacting with websites and their social media accounts. It could also help in mitigating the risks posed by such scams. An FBI spokesperson warned:

“Unfortunately, criminals are getting more sophisticated, using the surge in NFT interest to target innocent enthusiasts. We urge the community to stay vigilant, report any suspicious activities to us immediately, and always remember the adage: if it seems too good to be true, it probably is.”

Crypto Scamming Schemes on the Rise

Nearly five months ago, the FBI issued a warning about a rise in fake cryptocurrency investment schemes known as pig butchering, which resulted in losses of $2 billion in 2022.

One such category is CryptoRom, where criminals create fake identities on dating apps and social media platforms to establish romantic relationships and gain victims’ trust. Once they build up the trust, they introduce the idea of trading cryptocurrencies.

The scammers start initial conversations within the app where they initially connected with the victim. Then, they move the conversation to private messaging apps like Telegram or WhatsApp, where they persuade the victims to use fraudulent crypto websites or apps and make significant investments.

The FBI said that “criminals coach victims through the investment process, show them fake profits, and encourage victims to invest more. “When victims attempt to withdraw their money, they are told they need to pay a fee or taxes. Victims are unable to get their money back, even if they pay the imposed fees or taxes.”

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