Desperate FTX Customers Lured Into Secondary Scams

• FTX investors are losing hope of getting their money back from the bankrupt platform.
• With “only a fraction” of digital assets located, there is a risk of desperate investors falling for new scams.
• One high-quality deepfake video promises to make investors good but is just a way of doubling down on losses.

As if things couldn’t get any worse for those with funds tied up at FTX, they are now being tempted by deepfake scams promising ways to get their money back. One video which has gone viral features docked footage of FTX founder Sam Bankman-Fried promising to make investors whole again. The problem is it’s a secondary scam.

To make matters even worse, the deepfake video appearing to show SBF was a Twitter-verified account and was an exact impersonation of SBF’s personal account. With concerns about Twitter’s security levels already in the news and scammers being as persistent as they are, there is every chance some FTX investors will lose out to a double-dip type scam.

Now Deepfake SBF Video Goes Viral

The FTX compensation giveaway scam asks clients of the broken platform to send coins to an account to be reimbursed their FTX holdings. In the video, SBF appears to say:

“Hello everyone. As you know our FTX exchange is going bankrupt, but I hasten to inform all users that you should not panic. As compensation for the loss we have prepared a giveaway for you in which you can double your cryptocurrency. To do this, just go to the site ftxcompensation.com.”

It’s unsure how many have lost out to this second blow, but the video does, unfortunately, look at face value to have been of high enough quality to tempt some to double down on their losses.

FTX investors who have managed to resist the temptation presented by scammers can take little comfort in updates from regulators. Various authorities are poring over the FTX accounts, but recent comments from the new CEO John J. Ray suggest there is little hope of investors being made good. He said, “only a fraction” of FTX’s digital assets have been located and secured.

The potential $3bn black hole in FTX’s account still needs explaining, but little information has been forthcoming. That makes it easier for con artists to act. As painful as the situation is for FTX stakeholders, they can only sit and wait, count their losses, and avoid falling for scams that would worsen the situation.

Crowdsourcing information about scam brokers can help others avoid falling into the traps set by disreputable brokers, and you can share your experiences here. If you would like to know more about this particular topic or have been scammed by a fraudulent broker, you can also contact us at [email protected]

About the author: Justin Freeman

Justin is an active trader with more than 20-years’ industry experience of working for big banks and hedge funds. He has an inside knowledge of how the financial markets work, thanks to roles including trader on a $750m Event-Arbitrage desk and CRO and COO of hedge funds running a variety of strategies. From stat-arb and trend-following CTA to fixed-income relative value. Firm’s he has worked at include big banks like Citi, and prominent hedge funds including D. E. Shaw and Millennium Capital Management.

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