The most significant hazards to investors in 2022, according to NASAA (North American Securities Administrators Association), are cryptocurrency and digital asset-related frauds. Investors should be aware of the current cryptocurrency phishing scams getting more attention worldwide.

According to the FTC’s research, threat actors exploit popular social media platforms like Instagram and Facebook as a playground for pulling investment-related scams. Due to their popularity and excellent profits, crypto assets and stablecoins make appealing targets, making cryptocurrency one of the most vulnerable marketplaces for investors globally.

Summary of the Report

NASAA released a report on top investor threats for 2022, highlighting cryptocurrency threats as the most significant of all.

  • Scammers use investment scams with promises of guaranteed high returns with little risk, which is why investors need to understand the threat properly and avoid scam artists.
  • 2022 will continue to see investors losing their crypto to scam artists via social media, unregistered private offerings, etc.
  • Cryptocurrency and other digital assets are not regulated, which is why scammers can dupe investors by offering Ponzi schemes and other fraudulent opportunities.

Investors should understand the high risks of loss while tying their assets in cryptocurrency trading, crypto mining pools, and depository accounts.


What are Cryptocurrency Phishing Scams?

Cryptocurrency phishing scams involve social engineering and scamming tactics in an attempt to steal security codes, private keys, and cryptocurrency directly. Fraudsters use social media platforms such as Facebook and Instagram and request cryptocurrency to promise significant returns.

Cryptocurrency phishing scams are not new and have been around for some time. One of the most famous cases of recent times was the 17-year-old Graham Clark from Florida. He hacked the Twitter accounts of notable figures such as Bill Gates, Elon Musk, Barack Obama, Joe Biden, and more and scammed individuals out of $100,000 worth of cryptocurrency.

Cryptocurrency phishing scams can be initiated via:

  1. Texts: Cryptocurrency phishing messages with malicious links to cancel withdrawals leading to fake websites designed to steal login credentials. Fraudsters may also approach you directly via call and present investment opportunities to entice you into giving up your account information or cryptocurrency.
  2. Emails: Cryptocurrency phishing emails with links to imposter websites designed to impersonate legal entities or organizations with deposit links that send your crypto assets to illicit addresses. These websites often con you out of your digital wallet credentials or have fake addresses for payments.
  3. Applications: Malicious actors also use fake mobile applications for fraud. These mobile applications look authentic and have customer reviews highlighting opportunities provided by the app. The applications have inbuilt payment portals that might look authentic but are directed to the address of the scammer’s wallet.
  4. Social Media: Social media platforms are among the biggest platforms for fraudsters who create phony profiles and reach out via DMs (Direct Messages). These profiles may have many followers and positive comments but use social engineering and fake investment opportunities to steal from you.


Why Scammers Are Targeting Cryptocurrency and Digital Assets

Cryptocurrency has topped the list for investment-related frauds due to the lack of a regulatory structure around digital assets. Furthermore, cryptocurrency assets are entirely digital hence providing threat actors many vulnerabilities they can exploit. Another factor that attracts fraudsters to cryptocurrency is the lack of knowledge about how to keep oneself safe from phishing attacks. Individuals and investors are trying to get into the cryptocurrency market without proper knowledge and often find themselves roped into an easy investment scheme that they find lucrative, only to be conned.

Key Statistics

  • The total loss due to fraud via social media platforms is $770 million, involving nearly 95,000 people.
  • FTC’s data spotlight report of 2021 revealed that 64% of social media investment frauds involved cryptocurrency payments.
  • $14 billion was lost to fake digital wallets and addresses in 2021.
  • 20% of the money lost due to romance scams since October 2020 involved cryptocurrency transfers for investments.

With the wide adoption of digital assets and cryptocurrency, these statistics are likely to get worse moving forward, which is why it would be best to educate yourself before you are the one who is scammed.


How to Avoid Crypto Phishing Scams?

While the losses faced by losing cryptocurrency can be huge, a few simple steps can help you avoid threat actors. Investors can prevent crypto phishing scams and typical fraudulent schemes by:

  1. Verifying Individuals and Websites: Fraudsters may be found on social media or counterfeit services, which is why investors should always confirm the integrity of an offer by identifying and evaluating the trade and the person presenting it. Always ask for formal paperwork and go through the website. Fake websites often have minor grammatical errors that are easy to find. Always validate digital addresses for payments on the official websites before initiating payment and avoid payment via QR codes.
  2. Don’t Get Swayed Away By the Fake Clientele: Scammers utilize fraudulent testimonials and excellent ratings to build a false favorable picture for their services. Scammers also create bogus comments, so one should learn to identify misleading reviews and information to safeguard themselves.
  3. Lookout for Warning Signs: Scammers tempt investors by promising large profits in a short period, such as hours or days. If an opportunity presents itself with high-risk low rewards, it’s most likely a cyber adversary attempting to defraud you. Investors should learn to recognize such scams and steer clear of investments that appear effortless and offer immediate high yields. Always avoid free giveaway schemes that ask for your personal information.


Final Words

Cryptocurrency phishing scams and other digital asset-related fraudsters are rising and pose a significant threat to investors. You can easily avoid scam artists targeting your cryptocurrency by learning to identify the telltale signs of any fake investment opportunity. With the rising adoption of cryptocurrencies, 2022 can be the year where the number of cryptocurrency-related phishing scams can rise significantly. Hence, users must keep themselves aware of the latest phishing tactics and adopt anti-phishing solutions to safeguard their digital assets and keep malicious actors at bay.