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Outbreak of Crypto Frauds Amid Coronavirus Outbreak

Apr 01, 2020

As the number of global coronavirus cases grows each day, unscrupulous hackers and cyber-criminals are once again using sophisticated malware, phishing and scam techniques to steal people’s money and crypto holdings.

Thousands of fake websites, maps, applications, program downloads, and email phishing campaigns are used in order to steal passwords, money, and cryptocurrencies, or hold user files to ransom. The City of London’s National Fraud Intelligence Bureau (NFIB) has tracked 21 coronavirus scams since February, with a small number asking victims for bitcoin. It reports that non-crypto schemes have managed to scam around £800,000 so far.

Crypto currency related scams have forced many countries to issue investment scam warnings of their own.

The UK’s Financial Conduct Authority (FCA) has warned investors to avoid coronavirus-related cryptocurrency schemes that may seem too good to be true. “These scams take many forms and could be about insurance policies, pensions transfers or high-return investment opportunities, including investments in cryptoassets,” the FCA writes. People are advised to immediately reject any offers coming out of the blue, beware of adverts on social media channels, avoid giving out personal details and keep an eye on its own warning lists.

The Securities and Exchange Commission (SEC) in the US has issued similar advice to citizens. “When investing in any company, including companies that claim to focus on coronavirus-related products and services, carefully research the investment and keep in mind that investment scam artists often exploit the latest crisis to line their own pockets,” the SEC wrote.

Also, the European Central Bank (ECB) sent a letter to significant institutions on the beginning of March to warn them to prepare contingency plans against these threats.

Among other scams, one of the most common is called “pump and dump.” The sceme consists of fraudsters who, based on penny stock purchases, try to boost prices by sharing “positive” information that turns out to be fake. The method is to create fake news about companies that have allegedly found a cure for COVID-19. In this case fraudsters try to “capitalize on fear”.

Also, popular are scams using the COVID-19 outbreak to exploit fear and uncertainty through text messages and emails posing as an official health organization. Scammers are claiming to be able to provide a list of COVID-positive residents in their area for an undisclosed sum of bitcoin and are faking legitimacy by posing as the World Health Organization (WHO) as well as the U.S. Centers for Disease Control and Prevention (CDC). There's also been a flurry of text messages posing as "UKGOV" – an apparent mimic of the official domain – offering a payment of £458 ($558) to all residents as part of its promise to battle COVID-19 and directing them to a malicious website via a text message link.

The WHO has said before that crooks trying to steal money and private information are using phishing emails purporting to be from the agency and referencing the coronavirus, also known as “2019-nCOv”. Cybercriminals use emergencies such as 2019-nCov to get people to make decisions quickly.

The world’s most popular video-hosting website is apparently having trouble discovering a major scam account involving crypto. A fake YouTube account with 277,000 subscribers was revealed after impersonating CEO of major blockchain company Ripple, in order to promote a fake airdrop scam. The video description promotes a nonexistent airdrop of 50 million XRP tokens and has amassed over 85,000 views as of press time.

Criminals are using the coronavirus chaos to set up phony Bitcoin donation channels, posing as representatives of the World Health Organization (WHO).

As more people become interested in crypto currencies, more people are also likely to try and pull off a scam, so here are few tips to avoid becoming scams (not only against crypto frauds amid coronavirus outbreak) victim:

  • Don’t give out any personal details (address, bank account, financial details);
  • Don’t get rushed or pressured into a “last minute” decision;
  • Reject out-of-the-blue proposals that come unannounced and sounds too good to be true;
  • Beware of social media and sponsored or paid-for adverts;
  • If existing providers call unannounced, call them back to make sure they’re legitimate.

There is no one formula to avoiding being scammed, but reading up on the latest bitcoin red flags, keeping information private, and double checking sources before investing in anything are good standard procedures that may help save you from being duped.

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