Despite a drop in cryptocurrency scams in 2020 due to the pandemic, a new report highlights the massive growth in crypto scams and the profitable results they’re yielding.
Some see investing in cryptocurrency as a legitimate means to make money. So, it makes sense that scammers are looking for ways to rob their victims of cryptocurrency rather than risk breaking into bank accounts, using stolen credit card details, etc.
One of the most prevalent scams are “rug pull” scams. The main motive is to gain interest in either a bogus token that doesn’t exist or build interest in new crypto and then ditch the project after victims invest.
According to cryptoanalysis firm Chainalysis’ 2022 Crypto Crime Report, it’s these rug pull scams that account for the massive uptick in crypto scams in 2021.
In addition to rug pulls, investment scams – in which victims are promised high investment returns in exchange for putting up crypto assets they will never see again – are also rising. According to the Chainalysis data, the number of investment scams rose in 2021 by over 60%.
Most investment scams last an average of just 70 days (that’s down from 192 in 2020). Even the U.S. Securities and Exchange Commission recently put out a notice about the danger of these investment scams.
Novice and professional investors should be wary of scams that claim to make much higher investment returns. An investor’s desire to make a quick buck because they’re “in early” on new crypto likely isn’t going to pan out the way they hoped.
Protect yourself and your employees from cryptocurrency impersonation and other social engineering scams with Security Awareness Training.
Information used in this article was provided by our partners at KnowBe4.