Coronavirus worries become a gateway for cryptocurrency scammers: Internet Scambusters #915
Scammers know how to make the most of current crisis situations to convince victims they're legit.
That's what's happening right now as crooks pretend to offer investment opportunities or solicit donations relating to the coronavirus pandemic.
We'll tell you what they're up to in this week's issue and what you can do to avoid falling for their scams.
Let's get started...
Cryptocurrency Crooks Use Covid Pandemic to Hide Scams
Cryptocurrency scams seemed to have been fading somewhat into the background as investors in bitcoin and other virtual currencies adopted a wary eye to this volatile market.
But it turns out it's just that the scam spotlight has moved on to the coronavirus (Covid-19), and the currency tricksters are as active as ever, using the pandemic as a cover for their activities.
Recently released statistics show that losses from fraud involving bitcoin and other cryptocurrencies almost doubled last year. According to market analysis firm Chainalysis, the value of crypto frauds was $4.3 billion in 2019, compared with $3 billion for 2017 and 2018 combined.
And the firm has evidence of some cryptocurrency scams actually linking into the COVID pandemic.
Chainalysis says the pandemic has wiped out one third of scammers' profits since March because of the decline in currency value. The 7-day average value of cryptocurrency fraud has dropped from around $750,000 to about $500,000.
But that's still a lot of money. And the scammers have other tricks up their sleeves
"Nearly all of the scam revenue losses so far are concentrated to investment scams and Ponzi schemes, two scam sub-categories that together make up the vast majority of cryptocurrency scamming activity," the firm says.
"But while Covid-19 has hurt that set of scammers, it's giving others who favor email spamming tactics new stories they can use to try and fool their victims.
"While we've seen very few successful examples of such scams using Covid-19 so far, we still need to take them seriously and ensure the general public is made aware of them."
Main Covid Cryptocurrency Scams
There are several types of Covid cryptocurrency scams doing the rounds at the moment.
The first one is a phishing trick in which emails are sent out pretending to come from one of the big cryptocurrency exchanges, alerting subscribers to a coronavirus issue affecting their account.
If it lands in the inbox of someone who has an account with this exchange, it tries to trick them into clicking a link that supposedly links to their account. It's a fake page in which victims give away their sign-on details.
From there, their entire cryptocurrency account is untraceably drained.
Alternatively, messages purport to come from charities, the government's Centers for Disease Control (CDC) or the World Health Organization (WHO) seeking cryptocurrency donations to fight the pandemic. The attraction to the scammers is that these donations are untraceable.
Chainalysis says it's also seen scammers claiming to have medical supplies or treatments that can be paid for with virtual currencies.
The other main type of scam is a vicious type of blackmail. The crooks send messages claiming they have the disease and threaten to spread it to the victim's family unless they pay a fee.
The British newspaper, The Observer, reports on one message where the sender claimed to know where the victim lives, who they talked to and how they spent their days.
In many cases, much of this information can be gleaned from victims' social media posts. The result: A $4,000 extortion demand to be paid in bitcoin, the most common cryptocurrency.
"If I do not get the payment: I will infect every member of your family with the coronavirus," the message, intercepted by security firm Sophos, says.
Sophos principal research scientist, Chester Wisniewski, adds: "Cybercriminals are wasting no time in shifting their dirty, tried-and-true attack campaigns towards advantageous lures that prey on mounting virus fears."
More to Come
Still, this particular scam is in its early stages. We can expect to see more cases in coming weeks.
Meanwhile, some of the most common cryptocurrency frauds continue to be Ponzi schemes -- scams in which victims are invited to pay for a dubious bitcoin investment promising high returns. They send a bitcoin payment to the scammer or other people who've joined the scheme.
In return, they're supposed to invite others they know to join and get a flow of cryptocurrency income from further down the chain. This works until the scheme collapses and only the people at or near the top make any money.
As usual, the best way to avoid these scams is by not clicking on links and to be skeptical about any investment or donation request that relates to cryptocurrencies.
To the best of our knowledge, no government or global agency dealing with the pandemic is soliciting financial contributions, let alone as bitcoin. And, as far as we have been able to tell, charities that are helping victims of the pandemic do not ask for cyber payments.
And anyone considering investing in a cryptocurrency program should seek advice from a financial professional before proceeding.
More Coronavirus Scam News
Another way in which crooks are adapting existing scams to the Covid pandemic is in the shape of business email compromise (BEC) tricks, according to a recent FBI alert.
One of the common forms of this scam involves crooks posing as existing clients of an organization or small firm. They already have details of senior executives from phishing activities, so they message the boss, posing as a known supplier, saying invoices have to be paid to a different account because of the pandemic.
The new account, of course, belongs to the crooks.
Scammers are also using the other main form of BEC fraud, this time pretending to be the boss of a firm instructing a lower employee to make a payment to a new account, to meet the requirements of coronavirus restrictions -- for example, for the purchase of personal protective equipment (PPE).
Red flag warnings of this scam include claiming the payment is urgent; last minute changes in money wiring instructions; changes in the way a client communicates with you; a refusal to communicate by phone; and requests for advance payment when this is not normal.
Check out the full FBI alert.
Time to conclude for today -- have a great week!