Scammers Are Exploiting Crypto Owners in Liquidity Mining Scam: Report

The FBI recently issued a Public Service Announcement to “warn American citizens about a cryptocurrency scam using an investment strategy called Liquidity Mining in which scammers exploit owners of cryptocurrency, typically Tether (USDT) and/or Ethereum (ETH).”

The scammer “builds a professional or personal relationship with victims over a few days to weeks, gives instructions for purchasing if the victims do not already own cryptocurrency, and entices them to participate in liquidity mining by guaranteeing a return on investment of one to three percent daily.”

Scammers convince victims “to link their cryptocurrency wallet to a fraudulent liquidity mining application.” Scammers then “wipe out the victims’ funds without notification or permission from the victim.”

Since January 2019, according to the FBI’s Internet Crime Complaint Center (IC3) and open source, this scam “has been responsible for over $70 million in combined victim losses.”

Scammers approach potential victims “through an unsolicited direct message (DM) on social media, dating applications, or messaging services such as Facebook, Instagram, Twitter, LinkedIn, WhatsApp, etc.”

Victims may also “learn of the fraudulent liquidity mining site through someone they know who is unwittingly being scammed on the same platform.”

Scammers do “not differentiate between individuals who own or do not own cryptocurrency, directing victims who do not already own cryptocurrency to set up an account with a wallet service and purchase cryptocurrency.”

The scam does “not require a minimum investment, allowing the victims to “invest” any amount they want.”

In the DM approach, scammers send out “unsolicited messages to potential victims through social media or messaging services.”

The scammer “engages the victim in conversation and attempts to initiate a personal or professional relationship, building trust over a period of days to weeks.” During this period, the scammer will “bring up the topic of cryptocurrency investment opportunities, including liquidity mining.”

The scammer states they “have used this technique for a long time and have seen an amazing return on investment.” The scam is “not immediately apparent since the overall conversation is two people trying to get to know each other.”

For more details on this update, check here.

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