The U.S. Department of Justice has arrested a security engineer, Shakeeb Ahmed on charges of wire fraud and money laundering from a decentralized cryptocurrency exchange. Shakeeb, a New York resident, has been charged with devising and executing a high-value cryptocurrency theft. The DOJ says that Ahmed was able to “fraudulently obtain” around $9 million worth of cryptocurrency from the said exchange. He did it by creating fake pricing dates to generate the fees that he later took out for himself.
The press release issued by the United States Attorney’s Office said that Ahmed “laundered the million in fees that he stole from the Crypto Exchange all in efforts to conceal their source and ownership, including, conducting token-swap transactions, bridging fraud proceeds from the Solana blockchain over to the Ethereum blockchain and also exchanging fraud proceeds into Monero.” Sakeeb may have to face 20 years in prison if he is found guilty.
The release refrained from explicitly naming the DEX but many outlets such as CoinDesk suspects it to be Crema Finance, which is a Solana-based Exchange.
$1 billion lost in cryptocurrency scams in 2 years
Scammers have taken over a billion dollars from more than 46,000 people since the start of 2021, as per a FTC report. More than 70% of the scams happened in Bitcoin followed by Tether and then, Ether. The report also found that people aged between 20 and 49 were more susceptible to scams compared to the elder age brackets.”The stories people share about these scams describe a perfect storm: false promises of easy money paired with people’s limited crypto understanding and experience,” as per the FTC report.
The top platforms where users faced crypto scams are Instagram (32%), Facebook (26%), WhatsApp (9%), and Telegram (7%).In a crypto scam case, a 74-year-old LA business owner initially invested $500 with a fraudulent company, SpireBit, only to be lured into investing his entire life savings, totaling over $340,000. A crypto scammer conned victims out of $139 million last year, per FTC.
What are the types of crypto scams?
Scam in the world of crypto is similar to scams in any other field. These scammers are mostly after your crypto asset. There are a few ways that are exclusive to this field while some tactics are the same as any normal financial scam that you might already know about.
Phishing scams: The old-school technique of accessing the victim’s account details and crypto keys. Phishing scammers often lure the victim into clicking some dangerous link to a fake website where they can then take your account details very efficiently and quickly. For example, the scammer can send you an email or simply a text informing you that a withdrawal was initiated and then provides a link for you to click in order to cancel the transaction.
Romance scams: Pretty self-explanatory! Scammers use dating websites and other platforms to find targets and lure them into believing that they are interested in a long-term honest relationship. The Federal Trade Commission found that more than 20% of the money that was reported to be lost and stolen could be linked to romance scams.
Social engineering: These scams used physiological techniques to manipulate and gain control of some crucial information about the victim and the accounts related to them.
Giveaway scams: These scammers pose as influencers and celebrities who capture adventure and then promise to match and multiply the cryptocurrency.
Fake investments: These target profit-seeking people in general whom they lure into investing in hollow deals.