New Zealand’s Financial Markets Authority (FMA) has raised concerns over an increasing number of cryptocurrency scams targeting social media users.
Fraudsters Exploit Social Media Platforms
The FMA recently issued a warning, emphasizing that scammers primarily operate on YouTube, WhatsApp, and Telegram. These fraudsters deceive users by promising high returns on investments.
YouTube Channels Mimic Credible Sources
Scammers create fake YouTube channels that appear to offer credible cryptocurrency trading advice. They encourage viewers to join private messaging groups on WhatsApp and Telegram. In these groups, the fraudsters pose as experienced investment professionals and lead victims to fake trading platforms that look like legitimate cryptocurrency exchanges.
A Calculated Approach to Deception
Initially, the fraudsters ask victims to deposit small amounts, which builds trust. They then show fake profit reports to convince victims to invest larger sums. However, when users try to withdraw their funds, the scammers demand additional fees, and the money is never returned.
The FMA has flagged over 40 suspicious trading platforms, including bi-investments.com, phoenix-trades.com, and bricsinvestlimited.com. For a full list, visit the FMA’s official website.
AI-Generated Scams Emerge
A new scam uses an AI-generated video of Elon Musk to trick users. The fake @Tesla account, with the username “tesla.elon-US,” promotes fraudulent cryptocurrency schemes to over 226,000 people.
Immediate Actions for Victims
The FMA advises anyone who suspects they have been scammed to cease all contact with the fraudsters immediately. They should report the incident to the relevant platforms and contact their bank for help in reversing the transaction.
Messaging Platforms Facilitate Scams
Scammers increasingly use WhatsApp and Telegram to promote unauthorized investment schemes. These platforms give fraudsters direct access to users, making it easier for them to manipulate and pressure their targets.
A survey of 631 traders revealed that 60% of them experienced financial losses on Telegram. WhatsApp came in second, followed by Facebook (56%), Instagram (51.8%), and SMS (50%). Even platforms like X (formerly Twitter) and LinkedIn reported loss rates of 43.7% and 45.4%, respectively.
Persistent Crypto Scam Alerts
The FMA continues to warn the public about fraudulent investment schemes. In May, it cautioned against scams using fake celebrity endorsements, where scammers promoted investments through fabricated news articles featuring New Zealand celebrities.
In March, the FMA flagged a “clone scam” that impersonated BTSWE, a legitimate cryptocurrency exchange in New Zealand.
Legal Actions Against Fraudulent Schemes
In a recent ruling, a California court fined five individuals $5 million for their role in IcomTech’s Bitcoin Ponzi scheme. The court found David Carmona, Juan Arellano Parra, Moses Valdez, and David Brend guilty of fraud and fund misappropriation. They violated the Commodity Exchange Act and CFTC regulations.
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