The Rise of Fraud on Web3: What Crypto Investors Need to Know

According to information from the Financial Markets Authority (FMA), fraudsters are actively using YouTube to promote their "services." They post videos offering tips on cryptocurrency investments to capture the attention of a wide audience. Viewers are then invited to join closed groups on messaging platforms like WhatsApp or Telegram, where high returns and bonuses are promised. Within these groups, fraudsters pose as professional investment advisors, convincing users to invest in fake platforms. These websites are designed to look like popular cryptocurrency exchanges, making the scam appear incredibly believable.

The scam works as follows: initially, investors are asked to deposit a small amount to "test" the platform's functionality. Afterwards, users are led to believe their investments have generated substantial profits, and they are offered the option to withdraw their funds. However, when attempting to withdraw, additional fees or charges are suddenly required. Naturally, the money stays with the fraudsters, and users lose their investments.

Fraudsters Targeting Cryptocurrency Users: What You Need to Know

The regulator emphasizes that these schemes are particularly effective due to videos promising "insider" tips on which cryptocurrencies are worth investing in. Many people are lured by the promises of easy profits, ranging from $2,000 to $7,000 per day, and fraudsters exploit this trust, claiming that such returns come with no risk.

The FMA recommends verifying the legitimacy of trading platforms through the Financial Service Providers Register (FSPR). This can help ensure that a company is authorized to provide such services. The regulator also strongly advises against contacting unknown individuals, sharing personal information, or clicking on suspicious links in videos or messages. Additionally, the FMA urges the public to immediately report any suspicious emails or fraudulent activity on YouTube to the Department of Internal Affairs.

Furthermore, in August, New Zealand's Ministry of Revenue proposed stricter reporting requirements for cryptocurrency transactions by virtual asset service providers (RCASPs). This new initiative aims to increase transparency in financial transactions and combat illegal schemes. Local authorities had already required traders to declare income from cryptocurrency transactions, a measure that is essential for strengthening oversight in this rapidly growing sector.

The Gemhunt team would like to remind you that in the Web3 industry, it is crucial to adopt modern security practices to protect your funds. In the rapidly evolving digital environment, such measures are not just recommended but essential. Stay informed, stay cautious, and don't let fraudsters exploit your trust.