The number of frauds in cryptocurrency has been rising along with the widespread expansion of the cryptocurrency world. Since cryptocurrency blockchain platforms are decentralized and anonymous, it is easy for investors to fall prey to the scams of cybercriminals.
This is the biggest ongoing problem in the cryptocurrency market. However, the scams can be avoided.
There are different ways a cybercriminal can scam an investor, some of them being the Pump and Dump, where the “project owner”(scammer) drives up the price of the crypto to gain the attention of the investors and then dump those once he receives the required funds, NFT rug pulls where the “project owner” creates a false promotion for crypto to gain the interest of the investors and then disappears once the investors invest in his crypto, etc. Hence, thorough research of the crypto, the price, and the website needs to be conducted before investing.
The consumer protection report of 2021 conducted by the US Federal Trade Commission found that 7,000 people lost their money worth $80 million to scam projects.
Recently, the Youtuber Kitboga came across one such scam and joined forces with Kraken to take down the scammers. Kraken is a cryptocurrency trading platform where you can buy and sell Bitcoin (BTC).
Kitboga posted a video on Saturday explaining in detail how he took down the scammers with the help of Kraken.
The scam was a Call Centre scam. Although this scam was an old one, it is still being used by cybercriminals to cheat customers. However, with the evolving technology, it is easy to defraud the scammer through a fake security alarm.
The Call Centre Scam is simple, the scammer designs a popup that looks very much like a security popup, but it does not warn the customers about the risk on their computer it asks them to call a fake hotline number. The scammers then pose as a cybersecurity agent and acquire the customer’s personal information such as login credentials and manipulate them into making payments to them. Numerous scammers even reach the extent of manipulating the customer to provide them with access to control their devices.
Kitboga explained on his YouTube channel how the Call Centre fraud was used to target the victim’s bank accounts and steal their digital assets.
As the Call Centre fraud progressed, Kitboga was contacted by the scammer and once they gained access to his computer, they asked Kitboga to check if his Kraken account was safe and if anything had been stolen from his account
Fortunately, the scammer was unaware that Kitboga had contacted Kraken earlier and had a fake account set up for this sting operation to expose the scammer. Kraken helped Kitboga set up a fake account that would appear to have an immense Bitcoin (BTC) balance.
The cybercriminals then requested Kitboga to make a withdrawal request where all the balance from the Kraken account would be transferred into the criminal’s account. However, every time the withdrawal request was clicked, the action failed as this account was already set up with encryptions to ensnare these con artists.
This sting operation benefited Kraken greatly as they were able to gather data on the multiple cryptocurrency wallets that these con artists were using. This helped Kraken to cease all the accounts of the scammers by sharing wallet addresses with other exchanges and closing the scammer’s laundering operation.
The information that was gathered was incredibly useful as with this data, the crypto exchanges around the world could take one step further into protecting their customers from cyber criminality.
Through this operation, we could concur that cyber criminality has evolved through the years. They have adapted their schemes to the trend of crypto owners.
Research in Canada shows that 35% of crypto owners have been swindled through such laundering operations.
From this scam, we could see that the scammers overcome various security measures set by the Crypto exchanges and wallet implements by using social engineering to manipulate their victims.
In the recent update, there was a scam targeting Coinbase users. The Coinbase users were alerted that their two-factor authentication had been changed. One of the victims recalled that he spoke to a “customer support” hotline agent that asked him for his two-factor authentication code and that is when he realized that something was suspicious and hung up the phone.
Disclaimer: This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
