US crypto exchange Coinbase has recently issued warnings about an alarming increase in the number of romance crypto investment scams, which are referred to as ‘pig butchering’, or ‘Sha zu pan’.
This type of scam usually involves perpetrators making use of social media and dating apps to look for potential victims.
They spend some time building trust with the victim before they carry out the scam, which is their primary aim.
According to the publicly listed crypto exchange, the number of scammers using dating apps and platforms for luring victims has seen a drastic increase of late.
Coinbase stated that the situation was worrisome and it needs to be quickly addressed. Investment and romance scams are certainly not a new phenomenon; they are one of the oldest online scams.
However, scammers have now turned towards cryptocurrencies for carrying out these scams, which involve illegal fund transfers, and this is definitely worrisome.
This is because crypto transactions are irreversible in nature and this is exactly what these scammers count on when they are engaging in their criminal activities.
Coinbase said that this has made these scams even worse for the victims because they are well aware that nothing can be done about it.
How they operate
The top crypto exchange in the US revealed that these scams usually involve fraudsters trying to convince their victims to put their funds in various investment schemes.
Coinbase disclosed that they claim to have made huge financial returns from crypto investments and try to convince victims to do the same.
In some cases, the scammers also offer to teach their victims how to make investments. They share a fraudulent website, which has been designed to imitate a genuine trading platform.
They then convince victims into depositing money in fake trading accounts on the website that they control and manage.
In some situations, the scammers immediately cease communication with the victim upon receiving the funds.
But, there are other cases where they even send a small return to the victim in order to gain their trust and then ask for a bigger deposit.
Coinbase said that it was cooperating with law enforcement agencies in order to bring down the number of these scams.
The crypto exchange said that they were collaborating to come up with different ways of protecting customers against various types of targeted cyberattacks.
Coinbase also said that their product blocklist also included a number of fraudulent crypto addresses that are involved in these scams.
While these investment scams are becoming rampant, so are listing scams in the crypto space. Only recently a few of these had come to light.
First off, Brazilian crypto platform Bluebenx claimed that it had been a victim of a listing scam. Secondly, even Binance’s name had been used in one such scam.
It involved its CCO’s hologram image being used to fool some crypto companies, but no statistics were revealed about this particular incident.