Ethereum

Chair

Gary

The U.S. Securities and Exchange Commission (SEC) has released a new alert about ongoing scams with what they call “crypto securities.” According to the agency, fraudsters are using the growing interest in crypto assets to lure people into their traps. This alert comes merely days after the SEC approved the launch of spot Ethereum ETFs. 
Also Read: <a href="https://www.cryptopolitan.com/sec-approves-all-spot-ethereum-etfs/">SEC Approves All Spot Ethereum ETFs</a> 
Fraudsters often use various tactics to obscure their identities and the trail of funds, making it hard to recover lost money. The SEC highlights five key strategies these scammers use to trick investors into handing over their money. 
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 NEW INVESTOR ALERT: 5 Ways Fraudsters May Lure Victims Into Scams Involving Crypto Asset Securities<a href="https://t.co/0Ag6l8hEbj" rel="nofollow" target="_blank">https://t.co/0Ag6l8hEbj</a> <a href="https://t.co/QsmSJvui1R" rel="nofollow" target="_blank">pic.twitter.com/QsmSJvui1R</a>— U.S. Securities and Exchange Commission (@SECGov) <a href="https://twitter.com/SECGov/status/1795865151133859852?ref_src=twsrc%5Etfw" rel="nofollow noopener" target="_blank">May 29, 2024</a>
</blockquote> 
<h2 class="wp-block-heading" id="scammers-target-users-through-social-media-and-accidental-contacts">Scammers Target Users Through Social Media and Accidental Contacts</h2> 
The SEC’s <a href="https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-alerts/crypto-scams" rel="nofollow noopener" target="_blank">alert</a> states that fraudsters commonly contact potential victims on social media platforms or through accidental text messages. They might pretend to be an old friend or claim they mistakenly contacted you. After gaining your trust, they move the conversation away from the initial platform. They may build a friendship or romantic relationship with you to gain your confidence and convince you to invest. 
One way this scam works is by suggesting lucrative investment opportunities, including those involving crypto assets. The fraudster may claim to have insider information or direct you to a legitimate-looking but fake website. 
They might even let you withdraw a small amount of “profits” to build your trust before asking for larger sums. When you try to withdraw your funds, they come up with excuses or demand more money for fees or taxes. Ultimately, you lose your investment and any additional funds you paid. 
<h2 class="wp-block-heading" id="scammers-are-riding-on-ai-hype-and-deepfakes-too">Scammers Are Riding on AI Hype and Deepfakes Too</h2> 
Fraudsters also exploit the excitement around emerging technologies like artificial intelligence (AI), per the SEC alert. They use the hype to attract investors to crypto asset securities. These scammers use AI-related buzzwords and promises of high returns to lure you in. They may claim to use AI bots to find the best crypto investments, but their real goal is to steal your money. 
Also Read: <a href="https://www.cryptopolitan.com/experts-dont-have-confidence-in-ethereum/">Experts Don’t Have Confidence in Ethereum Like They Do Bitcoin</a> 
AI technology helps these fraudsters create realistic websites and marketing materials for their scams. They can produce deepfakes—videos, images, or voices that appear real but are fake—to deceive investors. Fraudsters might create deepfakes of celebrities or government officials to gain your trust or convince you to send funds. Be aware that fraudsters may impersonate trusted sources, including the SEC. 
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 <img loading="lazy" decoding="async" class="wp-image-532865 size-full" src="https://www.cryptopolitan.com/wp-content/uploads/2024/05/image-316.jpg" alt="SEC Issues New Warning to Investors on Crypto Securities Fraud" width="1920" height="1380" srcset="https://www.cryptopolitan.com/wp-content/uploads/2024/05/image-316.jpg 1920w, https://www.cryptopolitan.com/wp-content/uploads/2024/05/image-316-300x216.jpg 300w, https://www.cryptopolitan.com/wp-content/uploads/2024/05/image-316-1200x863.jpg 1200w, https://www.cryptopolitan.com/wp-content/uploads/2024/05/image-316-768x552.jpg 768w, https://www.cryptopolitan.com/wp-content/uploads/2024/05/image-316-1536x1104.jpg 1536w" sizes="(max-width: 1920px) 100vw, 1920px">
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 SEC Chair Gary Gensler. Source: Reuters
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<h2 class="wp-block-heading" id="pump-and-dump-schemes-are-still-popular">Pump-and-Dump Schemes Are Still Popular</h2> 
According to the SEC, pump-and-dump schemes are still very common among crypto scammers. They involve artificially inflating the price of a crypto asset, often a memecoin, and then selling it at a profit. Fraudsters create buzz on social media to get others to buy the asset, pumping up its price. 
Once the price is high, they sell their holdings, causing the price to crash. Investors who bought the asset at the inflated price are left with significant losses. Never make investment decisions based solely on information from social media platforms or apps. Always do thorough research and verify the legitimacy of the investment. 
The SEC said that fraudsters may also tell you they mistakenly deposited money into your account and ask for a refund. They never actually deposited the money; getting you to send them funds is just a trick. If you have already lost money in a scam, they might target you again, offering to help you recover your losses for a fee. Do not trust these offers. You will likely lose even more money, said the SEC. 
Cryptopolitan reporting by Jai Hamid

SEC Issues New Warning to Investors on Crypto Securities Fraud

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