Beware of the new crypto scam floating around

Apart from all the problems that regularly arise in the cryptocurrency space, there are also many crooks who are ready to relieve people of the coins they hold, no matter how much their value has fallen.

The series of break-ins, exploits and scams never ends. Additionally, no matter how much someone like Sen. Kirsten Gillibrand (DN.Y.) says in an interview with Bloomberg Technology that “the interesting nature of blockchain technology is that it’s one hundred percent transparent, so if you want to track who bought or sold something through cryptocurrency, you can do that quite easily,” you can’t. Having a web address is not the same as having someone’s identity.

It’s up to the consumer – that’s you – to be careful and know when something might smell fishy and require it to be wrapped in old newspaper and thrown in the trash.

But as happens with technology, its fraudulent use also continues to evolve, as evidenced by a seizure file from the United States Attorney’s Office for the Central District of California. Defendant: “About 40.997711 EtherETH
eum digital currency.”

As the complaint reads, “PM is a resident of, and conducts business in, Orange County, California, in the Central District of California. PM controls an investment vehicle that invests in digital currencies, including Ethereum.

So there is an owner of Ethereum cryptocurrency, whose identity is being protected, who maintained a cryptocurrency wallet with Coinbase.

“On or about December 21, 2021, the victim, PM, received a pop-up message identifying an error while attempting to log into the victim’s account held at Coinbase on his laptop,” the complaint continues. “The popup message said, ‘Due to a recent activity, your account has been blocked. Please contact our support team at +1-810-420-8046 to remove office restrictions.’ The PM called the identified phone number and was connected to someone posing as a Coinbase representative. The individual PM spoke with identified himself as Ankit Anwaral (‘Ankit’). Ankit knew the PM’s login information and the PM’s current location. Ankit stated to the PM that in order to authenticate his information, PM had to transfer the cryptocurrency balance from his Coinbase account to a Coinbase Pro account, which was a more sophisticated account designed for investment professionals.Ankit asked PM to download a remote desktop application called ‘Anydesk’ to the laptop his computer to allow Ankit to remotely control PM’s computer. Once PM did so, unknown persons began transferring PM’s funds. Shortly thereafter, PM noticed that 40.997711 Ethereum, valued at $165,145.40 at the time, had been transferred from victim account Due to Ankit’s misrepresentations, the Prime Minister did not realize he had been defrauded until the entire content was transferred from the victim account n.”

The cryptocurrency then went through “many transfers before being reassembled in other wallets to hide the corrupt source.” (Again, when someone says that all blockchain activity is “transparent” and that people’s identities are easily discoverable, you can discount the individual as someone who knows far less than they think.)

“What struck me about this, I was impressed by the fact that the DOJ had filed such a civil enforcement action,” said Tal J. Lifshitz is a partner in Kozyak Tropin & Throckmorton’s complex litigation practice and co-chair of the firm’s cryptocurrency, digital assets and blockchain group. He adds that “999 times out of a thousand,” the response from the Justice Department to someone who has filed a complaint is, “We understand that you Mr. Offer were defrauded, but it’s your own fault.”

But there is a federal lawsuit instead, very possible because the person defrauded is well connected.

Usually people get scammed by scams that operate out of fear or greed. That’s usually a red flag. Providing a phone number to call is one of them. You always call the main number of the company and asked to be transferred to the person or something like a fraud department.

But in this case, the fraudster had significant information about the victim. Was it malware that was on the person’s computer and provided data that would be convincing? Some kind of penetration of Coinbase’s systems? Maybe it was a different kind of mechanism.

Whatever it was, reputable companies don’t want anyone online giving you a phone number to call because it looks too much like a scam.

Be aware that when there’s a lot of money potentially changing hands, there are people who won’t blink twice when they try to trick you into doing something stupid. Take the time to do the basics like calling the company through an independently provided number, asking questions. Anyone who tries to push you past the speed of intelligent thought is someone not to be trusted.