In their recent update, the US authorities confirmed they would return $7M to victims who fell victim to a sophisticated scam operating fake crypto investment platforms.
Key Highlights
- US authorities plan to return $7M seized from a foreign bank belonging to victims of a crypto investment fraud.
- The scammers won the victims’ trust only to direct them to participate in the fake investment websites.
- The fraudsters funneled the loot via 75 shell company bank accounts
- The Secret Service froze the funds in 2023 before initiating the civil forfeiture
- The Secret Service urges victims to contact its platform to recover the losses
The US authorities initiated the process to return $7 million to victims tricked into remitting money to a fake crypto investment platform. The refund to the victims emerged after the authorities seized the funds stashed in a foreign bank, with the US Attorney’s Office in Easter District, Virginia, confirming via a March 21 update.
Fraudulent Investment Scheme
The fraudsters behind the scam contacted their victims directly, earning trust over time. The scammers leveraged the confidence gained to direct the victims to platforms disguised as legitimate crypto investments. The websites utilized disguised designs, fooling the victims into believing they were genuine crypto opportunities. However, the sites displayed fake data on the victims’ investment growth and good returns.
Attempts by the victims to withdraw the money turned chaotic as the scammers pressured them to commit more investment. A common trick deployed by the actors was asking the victims to pay taxes on the profits realized to access the funds. Unknowingly, the scammers were moving stolen friends via 75 different bank accounts set up under shell entities that only existed on paper.
Scammed No More
The US authorities traced the funds trail, noting that the actors would send the proceeds to foreign bank. However, the actors disguised the transactions as normal domestic wire transfers that are difficult to track.
The Secret Service quickly seized a portion of the funds in 2023. They initiated the civil forfeiture process in the US District Court. Nonetheless, the banks claimed against the frozen funds. This compelled the US authorities to a $7 million settlement agreement.
The Secret Service has urged victims of the scam to contact and petition for the money recovery lost in the fraud. The case forms part of the crypto-related crime. Blockchain analytics firm Chainalysis warned that crypto crime is now within the professionalized era that has attracted efficient cybercriminal groups.
Crackdown on Scam in Australia
In Australia, the federal police informed 130 individuals of a message scam targeting digital asset users. The March 21 update copied the sender’s identity as a genuine crypto exchange.
Meanwhile, Social media users on X disclosed scam messages conveyed on March 14 disguised as sent by crypto exchanges Gemini and Coinbase. The actors attempt to trick the users into opening up new wallets whose recovery phrases were under the scammers’ control.
The scam mirrored a traditional finance attack where the actors allegedly used SMS and encrypted messaging platforms, with the sender profiled as a Binance representative informing the victims the crypto accounts were breached.
The message featured fake verification codes spoofed to appear in the legitimate message thread of the crypto exchange. The actors sent contact for support and informed the victims to protect themselves by transferring crypto to the trust wallet. The scammers were controlling the trust wallet to steal the assets deposited.
Cybersecurity Threats
Meanwhile, cybersecurity has become a key constituent within the crypto space as criminals target digital asset holders. This emerges as cybersecurity expert Malwarebytes warned on March 18. The actors hid the malware within the “cracked” TradingView Premium software.
Besides, the Incident Response Team discovered on March 17 that cyber scammers were deploying remote access trojan targeting crypto within 20 wallet extensions available for the Google Chrome browser.
The discovery is part of authorities’ devotion to caution crypto users against rushed investments. They urge users to consider official websites and applications by trusted platforms. The authorities are cautioning crypto holders against sharing private keys and recovery phrases.
