A report released by major crypto exchange Binance illustrates how scamstargeting cryptocurrency investors attempt to gain credibility.
In the report published on June 30, the exchange explained that itsBinance Sentry risk investigation service observed reports of fraudulentinvestment schemes promising quick or exponential returns oncryptocurrency investments. The frauds do not just concern crypto butalso forex, binary options and contracts for difference (CFDs).
Scams are often well-organized, big operations
Scam organizations are frequently the subject of regulatory warnings butoften use different, seemingly unrelated brands. In fact, what seemslike dozens of projects can often be just different branches of one bigoperation. In some cases “one brand might be crypto-specific, anothermay focus on forex or CFDs”.
Some fraudulent entities create false ‘consumer organizations’ thatsqueeze victims for even more funds after they become suspicious thatthe organization is a scam and try to report it. Projects oftenfabricate regulators and governmental agencies such as corporateregisters in an attempt to earn the trust of investors.
Binance Sentry also notes that the global nature of many of the scams,make legal action against them harder. The report explains:
“[Scam] victims are often situated all over the world, living injurisdictions that are different from the pseudo-services to whichthey fall victim. […] As one may expect, this not only results in anincreased level of difficulty for law enforcement investigations butalso complicates the process of establishing connections betweenvictims.”