Security Alert: 4 Different Types of Scams You Should Know About: Part Two
Scammers don’t always start by asking for your money outright. Sometimes, they start by earning your trust. Following last week’s look at AI impersonation and rug pulls, we’re continuing our guide to four different types of crypto scams. This week, we unpack two more scams used to draw people in. Would you recognise the warning signs before it's too late?
Identity Theft
This is when a scammer steals your personal information to impersonate you. Often the most devastating type of scam, as they can gain access to multiple accounts and parts of your life, from government to financial and even medical documents, not just your crypto account. Identity theft often starts with phishing messages/sites or information exposed in a data breach. In recent times, we have seen an increase in fake event registration forms; these are shown on Facebook and appear as real conferences, events, or community engagements. Once you click to register your interest, the scammers will ask targeted questions to gather enough information to appear informed about your crypto activity when they eventually make contact.
How the scam works:
The approach: A scammer poses as a crypto exchange or support team, claiming your account needs urgent verification or has a security problem.
Information theft: They direct you to a fake website or form requesting personal details, identification documents, or login information.
Account takeover: With enough information, they may try to reset passwords or take control of your phone number through a SIM swap, allowing them to receive SMS verification codes.
Theft: If they gain access to your crypto exchange account, they may attempt to transfer your crypto to a wallet they control.
For example: An email says, “Your crypto account has been suspended. Verify your identity to restore access.” The link takes you to a copy of an exchange website, where the information you submit goes to the scammer. This website is not associated with the exchange in any way.
Key Warning Signs:
Unsolicited contact: Calls or emails from an “exchange” that ask for personal information. Reminder: Cointree will never call and ask for your password. If you are ever concerned or unsure of the validity of contact made by Cointree, pause, contact us, and verify.
Password requests: Requests for wallet seed phrases, passwords, or one-time PINs.
Again, you can always contact Cointree yourself to verify if messages or calls are legitimate.
Transfers: Urgent demands to transfer crypto to external or cold storage accounts.
Pig Butchering Scams
Often referred to as a “relationship investment scam”, the name refers to the scammer “fattening up” a victim’s trust and investment before stealing their funds. This long-term scam involves a criminal building a fake relationship with a victim to gain trust before convincing them to invest in fraudulent platforms. Victims are most likely to be targeted through social media platforms, dating apps, and messaging platforms. “Pig butchering does not target individuals with the false hope of a relationship but instead initiates a conversation looking for friendship,’’ Assistant Commissioner Goldsmid, AFP, said.
How the scam works:
Initial contact: Scammers will reach out via social media, dating apps, or even ‘wrong-number texts’, usually starting with a casual greeting like “hello”.
Grooming phase: Over time, weeks to months, the scammer builds rapport and trust with the victim. Typically through a friendly relationship, mentorship bond, or a deep romantic connection. The scammer often shows off a lavish lifestyle that promotes the idea that they are wealthy and successful in their investments.
Introducing investment opportunities: The scammer will introduce a “foolproof” or “guaranteed” cryptocurrency investment method or opportunity, leading the victim to a fake trading website that they control. Sometimes the company name will be legitimate; however, they have created a replica of the business website to commit fraud. Typically, these investments will be pushed with urgency, stating that you must invest quickly, and with large sums of money.
Fake returns: During the early stages of “investment,” a victim may see massive profits on the fake dashboard, often leading to further larger investments, sometimes to the extent of investing their life savings.
The final theft: Once a victim would like to withdraw money, the fake platform will demand heavy fees or “taxes.” They may encourage victims to borrow from family and friends, sell assets, or get loans to pay the so-called fees. When the victim pays or runs out of cash, scammers will cut contact entirely.
Key Warning Signs:
Fast emotional intensity: Scammers will attempt to rush connections, pushing for constant contact and intimate conversations, in an attempt to build a sense of intimacy and trust.
Unsolicited contact: Scammers will often send unsolicited messages to strangers, whether online or via text messages, hoping for a response.
It’s too good to be true: Promises of high profits, no risk, and guaranteed success are always a red flag. If it sounds too good to be true, most of the time it is.
Time pressure: Scammers will often push the agenda that it’s a limited-time deal; you must invest quickly, or the opportunity will pass. Always take time, do your own research, and never feel rushed or pressured into an investment.
Source: https://www.cyberlawconsulting.com/pig_butchering_scam.php
Scammers may change their tactics, but the warning signs often stay the same: pressure to act quickly, promises that sound too good to be true, and requests for money or sensitive information. Don’t let a convincing video, a friendly message, or an urgent account alert take you by surprise; take a moment to pause and verify before you act. Protect your personal details, question unexpected offers, and contact Cointree directly if you’re unsure about a message claiming to be from us. Cointree recommends always using two-factor authentication, such as a UBI-Key as an added layer of protection on top of being aware and acting with caution, as a little caution now could save you a lot of trouble later.
