Binance, a major crypto exchange, released a report on Thursday which replicates how scams have targeted cryptocurrency investors in an attempt to gain credibility.
According to the report, the exchange explained that its Binance Sentry risk investigation service observed reports of fraudulent investment schemes promising quick or exponential returns on cryptocurrency investments. The frauds do not just concern crypto but also forex, binary options and contracts for difference (CFDs).
The report was published after a Bitcoin (BTC) scam targeted the residents of Winnipeg, Canada, in late June.
Scam organisations use seemingly unrelated brands
In a research, it has been said that scam organisations are frequently subject to regulatory warnings but often use different, seemingly unrelated brands. In fact, what seems like dozens of projects can often be just different branches of one big operation. In some cases “one brand might be crypto-specific, another may focus on forex or CFDs”.
It can be said that some fraudulent entities create false ‘consumer organizations’ that squeeze victims for even more funds after they become suspicious that the organization is a scam and try to report it.
Binance Sentry also notes that the global nature of many of the scams, make legal action against them harder.
“[Scam] victims are often situated all over the world, living in jurisdictions that are different from the pseudo-services to which they fall victim. As one may expect, this not only results in an increased level of difficulty for law enforcement investigations but also complicates the process of establishing connections between victims,” according to the report.