Criminals now have various methods to commit illicit activities involving cryptocurrencies, such as theft, money laundering, or hacking. These transgressions continue to evolve, making it challenging for security and law enforcement to keep up.
This year, law enforcement in the US confiscated $3.4 billion worth of assets in the Silk Road case, revealing the extensive capabilities of fraudsters. Such incidents occur frequently and on various levels, with over $2 billion in cryptocurrency scam losses reported last year alone.
With the advancement of superior technology, artificial intelligence, devices, and programs, hackers have honed their skills to execute sophisticated scams, resulting in significant financial damages totaling millions of dollars.
In this post, we’ll explore and share insights on the five most prevalent types of crypto-related crimes. We’ll also provide tips for safeguarding yourself against these threats.
Top 5 Crypto Crime Trends
Despite a rise in cryptocurrency-related crimes, regulatory bodies are working diligently to detect and address these offenses promptly. Penalties for such infringements have become more stringent, with increased fines and longer prison sentences.
Amir Bruno Elmaani, the brains behind the Oyster Pearl Token, has been given a five-year prison term due to his involvement in income tax fraud. In contrast, Ian Freeman received an eight-year sentence for laundering $10 Million in Bitcoin. Most recently, Sam Bankman was handed a 25-year jail sentence for his role in the FTX bankruptcy and money laundering schemes.
Despite the evolving nature of crypto crimes over time, a consistent approach is often employed. For instance, in the year 2024, some of the most prevalent forms of crypto criminal activity are predicted to include AI thefts, smishing attacks, ICO frauds, trading bot scams, and pump-and-dump schemes.
Artificial Intelligence Thefts
In more natural and easy-to-read language,
Instead of just this type of crime, there is also the issue of data theft involving personal information. Some artificial intelligence tools have been found to be responsible for this, resulting in extortion and robbery.
Smishing/ Phishing
Smishing and phishing scams involve receiving fraudulent text messages on your mobile device, often disguised as messages from familiar contacts. These messages may contain links, requests for downloads, or even demands for financial assistance or registration in supposed giveaways. In reality, these actions can lead to the theft of your cryptocurrencies.
Individuals can fall prey to airdrop frauds through unsolicited invites to supposedly free airdrops for renowned cryptocurrencies. Consequently, their digital wallets and crucial private keys get compromised.
Initial Coin Offering Fraud
An Initial Coin Offering (ICO) serves as a popular funding method for new crypto projects or businesses. Regrettably, some unscrupulous individuals have exploited this system to carry out fraudulent activities. They establish bogus companies and manufacture ICOs with convincing websites, social media platforms, and whitepapers to deceive potential investors and gain their trust.
Many ICOs (Initial Coin Offerings) promise high returns and superior services to attract investors, building trust with their claims. However, once they have raised the necessary funds, these fraudulent companies often vanish without a trace.
Trading Bot Scam
Trading bots have become available on multiple investment platforms as a convenient tool for monitoring crypto markets and managing investments. While some investors find this feature beneficial, others have unfortunately fallen victim to fraudsters who use these bots to deplete their digital wallets instead.
If these trading bots don’t perform optimally, the result will be subpar executions using weak algorithms, potentially resulting in financial losses.
In certain circumstances, deceitful investors construct convincing facades, displaying phony earnings. They then solicit funds from the public, assuring them of profitable returns. Unfortunately, such schemes often unravel into Ponzi schemes, resulting in significant financial losses for unsuspecting investors.
Pump & Dump Schemes
Fraudsters have employed token manipulation strategies, known as pump-and-dump groups or schemes, since the inception of the crypto industry. These deceitful practices involve artificially inflating or deflating a token’s price through mass buying or selling, while disseminating false information to sway market sentiment.
In the instances of price increases and decreases, swindlers reap substantial gains while others suffer from losses.
How To Be Safe From Such Crypto Crime Trends
Crypto swindlers have been refining their methods over time, but investors can take some essential precautions to protect themselves against these scams.
To begin, it’s essential to immerse oneself in the industry and stay updated on the latest trends. By doing so, you’ll be able to recognize new developments and network with professionals to expand your knowledge. Before making any investments in tools, cryptocurrency exchanges, or ICOs, this foundational knowledge will prove invaluable.
In the next stage, securely hold your cryptocurrencies in a hardware wallet or reliable exchanges that offer two-factor verification.
Above all, avoid joining any groups or participating in activities, airdrops, or incentives provided solely through social media. Maintaining a clear and cautious mind, along with thorough investigation, is crucial for avoiding most scams.
Conclusion
as technology advances and new crypto innovations emerge, it grows increasingly challenging to distinguish scams from legitimate opportunities. However, keeping informed about current crypto fraud trends can aid in recognizing deceitful activities. Crypto investors are advised to exercise caution with unfamiliar links, tools, investment proposals, and unsolicited recommendations.
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2024-04-13 15:20