Daily fraud update: 14th April

FBI warns of rise in crypto scams due to coronavirus pandemic

The US Federal Bureau of Investigation (or FBI for short) has publicly revealed that the coronavirus pandemic is leading to a rise in crypto scams.

The organisation, which is one of the world’s most famous law enforcement agencies, said that crypto fraud and associated money laundering was on the up due to the pandemic.

It claimed that increased “accessibility of cryptocurrency” was in part responsible, and warned that all sorts of people could be at risk from the problem.

“People of all ages, including the elderly, are being victimized by criminals through cryptocurrency-related fraud schemes. Developments in cryptocurrency technology and an increasing number of businesses accepting it as payment have driven the growing popularity and accessibility of cryptocurrency,” it said.

“There are not only numerous virtual asset service providers online but also thousands of cryptocurrency kiosks located throughout the world which are exploited by criminals to facilitate their schemes. Many traditional financial crimes and money laundering schemes are now orchestrated via cryptocurrencies.”

And it also broke down the types of crypto scams which the Bureau had observed.

It claimed that common blackmail attempts – in which crypto fraudsters usually attempt to forcibly extract Bitcoin payments in return for not publishing embarrassing information – were appearing again, except this time with a threat to infect the potential victim with the virus unless the payment was made.

Another such scam is the “work from home” scam.

“Scammers, posing as employers, may ask you to accept a “donation” of funds into your own bank account and to deposit them into a crypto kiosk,” the FBI said.

“The so-called “donation” is likely money stolen from others. Your acceptance and transfer of the stolen money is considered illegal money mule activity and potentially unlicensed money transmission.”

And it also said that scams pertaining to the the distribution of coronavirus-related preventative products were rising as well.

“Scammers have been known to lure customers from trusted e-commerce sites offering products that claim to prevent COVID-19 onto unrelated and unregulated messaging sites to accept payment in cryptocurrencies for products that do not actually exist,” it explained.

The FBI finished its warning by issuing some advice to those who may be at risk from the increased crypto fraud caused by the crisis.

It advised people to verify “that a vendor/charity is legitimate and accepts cryptocurrency before sending payments/donations”, for example.

And in what appeared to be a warning against becoming accidentally involved in money laundering, it also advised caution when using personal bank accounts.

“Do not use your personal bank accounts for work-from-home business-related activity or provide your bank account information to someone who is not named on the account,” it said.

The FBI is not the first to warn of a potential increase in scams due to coronavirus. Britain’s Financial Conduct Authority, for example, has warned of similar.

Chris Lee

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