Financial Markets Authority (FMA) has raised an alarm regarding a surge in cryptocurrency investment scams targeting social media users through YouTube channels and messaging platforms. Fraudsters are creating YouTube channels offering cryptocurrency trading advice, enticing viewers into private WhatsApp or Telegram groups with promises of investment tips and prizes. Once engaged, scammers pose as investment experts and direct victims to fraudulent trading platforms that mimic legitimate cryptocurrency exchanges. The scammers follow a pattern of encouraging small investments to build trust, showing fabricated profits to attract larger investments, and then demanding additional fees when users try to withdraw funds, without releasing any money.
The FMA has identified over 40 suspicious trading platforms, such as bi-investments.com, phoenix-trades.com, and bricsinvestlimited.com, all designed to appear legitimate but operated by scammers. The authority advises investors to verify trading platforms through the Financial Service Provider Register, avoid unsolicited investment advice on social media, report suspicious activities to relevant platforms, and contact banks immediately if funds are transferred. Victims of these scams are encouraged to cease all contact with the scammers, report incidents to relevant platforms, and contact their bank to attempt transaction reversals.
Financial scammers are increasingly using WhatsApp and similar messaging platforms to target victims, as reported by Finance Magnates last month. These fraudsters promote unauthorized investment schemes through direct contact via mobile messaging, making it easier to reach unsuspecting individuals. A survey of 631 traders showed Telegram as the riskiest platform for trading scams, with 60% reporting financial losses. WhatsApp, Facebook, Instagram, and SMS also posed significant risks, while X (formerly Twitter) and LinkedIn were slightly safer but still concerning, with a significant percentage of users reporting losses.
The FMA recently warned about fraudulent investment schemes utilizing fake celebrity endorsements. The prevalence of social media ads promoting crypto and forex investments with fabricated celebrity endorsements has been on the rise. These scams often feature fake news articles seemingly from reputable New Zealand media outlets and use local celebrity images for credibility. In March, the FMA cautioned against a clone scam impersonating BTSWE, a legitimate cryptocurrency exchange in New Zealand. Fraudsters claiming to be BTSWE representatives contacted consumers, falsely promising to recover funds lost in unsuccessful investments, highlighting the risks associated with scams exploiting recognized platforms and individuals.
In conclusion, it is crucial for investors to exercise caution when engaging with cryptocurrency investment advice on social media platforms. Verifying trading platforms through official registers, avoiding unsolicited advice, and promptly reporting suspicious activities are essential steps in protecting oneself from scams. With the prevalence of fraudsters using messaging platforms like WhatsApp to target victims, it is important to remain vigilant and not fall for promises of high returns from unauthorized investment schemes. The FMA’s warnings about fake celebrity endorsements and clone scams underscore the need for thorough research and due diligence before making any investments in the cryptocurrency space. By being aware of these risks and taking proactive measures to protect oneself, investors can minimize the chances of falling victim to cryptocurrency investment scams.
