March 29, 2024

FBI warns crypto investors about liquidity mining scams

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FBI warns crypto investors about liquidity mining scams

Since 2019, criminals have stolen more than $70 million in a successful new fraud scheme, according to the Federal Bureau of Investigation.

The FBI issued a warning sayingnotified cryptocurrency investors that an investment strategy called “liquidity mining”, used to generate passive income, often becomes a tool of fraud:

“In legitimate liquidity extraction operationsinvestors place their cryptocurrency in a pool to provide traders with the liquidity needed to conduct transactions. In return, the investor should receive a portion of trading commissions.”

Fraudsters, in turn, convince victimslink cryptocurrency wallets to their liquidity mining applications, after which the victims’ wallets are completely emptied without the owners’ notice. Often, scammers contact victims through social networks, dating apps and instant messengers.

According to the FBI, victims of such fraudtransfer cryptocurrency from their wallets to a liquidity mining platform, and after investing, they often see the amount of expected profit in a fictitious interface. Believing that their investment was successful, they buy additional cryptocurrency. Fraudsters actually move all of the victim’s stored cryptocurrency to your wallets:

“Since January 2019, according to the FBI Internet Crime Complaint Center and public records, the new scheme has resulted in more than $70 million in cumulative losses to victims.”

Earlier, FBI agent Sean Ragan said on CNBC that crypto scammers pose a particularly serious threat on LinkedIn, where “there are already many victims and potential victims.”