The Vermont DFR claims malicious actors use "more complex <and> personalized tactics" to lure investors.
The Vermont Department of Financial Regulation (DFR), a United States agency, has issued a warning about increasing cryptocurrency investment scams on social media platforms.
To illustrate the issue, DFR referenced 74-year-old man Naum Lantsman's story on how the man lost his life savings, amounting to $340,000, in a cryptocurrency scam on Instagram and Telegram.
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Lantsman's initial interaction with the scammer occurred on Instagram via a post from SpireBit, claiming to be an "international financial broker" in cryptocurrencies.
Without investigating or researching the platform, Lantsman set up an account on SpireBit. Shortly after that, a representative of SpireBit contacted Lantsman on Telegram and persuaded him to invest in cryptocurrencies. Initially, Lantsman invested $500. However, the series of investments led to the man losing over $340,000.
Fake platforms like SpireBit show profits on every trade, thus, encouraging investors to invest more money. Despite being aware of cryptocurrency scams, Lantsman never thought he would fall prey to such a scam.
The Vermont DFR attributes the increase in cryptocurrency scams to scammers using "more complex, personalized tactics" involving several layers of deception, from forging bank documents to friendly conversations.
In its announcement, DFR urges investors to perform background checks (DYOR) to combat such scams. On top of that, the people of Vermont are urged to report any suspected fraud to minimize financial damage and catch criminals.
Eun Young Choi, director of the National Cryptocurrency Enforcement Team (NCET) at the Justice Department, identified decentralized finance (DeFi) hacks as a significant problem, particularly considering the involvement of North Korean "state-sponsored hackers."
Despite crypto scams being a prominent problem, in the first half of 2023, cryptocurrency scams declined by 77%.
