Navigating Crypto Deceptions: Old scams are still popular. Here’s what to look out for

Cryptocurrencies open doors to exciting possibilities, but they come with their share of cautions you should be aware of. At Xapo Bank, our dedicated fraud team is always vigilant, working tirelessly to shield you from risks. However, true safety is a joint effort. Dive into our monthly Navigating Crypto Deceptions series, where we shed light on scam risks and break down their complexities. Together with your awareness and our expertise, we can ensure you a confident journey through the crypto world. 

In this edition, we look at a few old crypto scams that have recently regained traction, offering you practical insights and tips to safeguard your wealth against these cunning threats.

Impersonation of Xapo Bank Staff or Xapo Bank Representatives

The first on our list is the impersonation of our staff members. In this scenario, fraudsters introduce themselves as Xapo Bank representatives, exploiting customers' trust in our brand as a means to achieve their objective. They may offer their victims a cash reward for opening an account with us or charge them an "extra fee" for making transactions in our app.

These impersonation attempts also take the form of fake advertisement campaigns on social media or in Google search results, announcing "one-time incredible investment opportunities" or promising large monetary rewards for opening a Xapo Bank account.

‍Impersonation of Investment Brokers

The second trend on our list is an increase of pseudo-investment brokers or "consultants", offering high-return investments and going the extra mile to help their victims open a Xapo Bank account, including an additional crypto wallet account with another provider. This allows their victims to transfer traditional currency from their bank to Xapo Bank before exchanging it for crypto in our app. Then, they send the newly exchanged crypto into the additional crypto wallet they were asked to create.

However, the caveat is that the crypto wallets are being controlled by the fraudsters without the knowledge of the victim, allowing wrongdoers to withdraw funds as soon as they are deposited. Some crypto wallets we have seen being abused by fraudsters are Trust Wallet, Atomic Wallet and Exodus Wallet.

Mining Machines and Cloud Mining scams

The third deception getting quite some traction recently is being given the opportunity to invest in "mining machines". Fraudsters will approach their victims in an attempt to sell cryptocurrency mining machines at a fixed price, once again promising very high returns. However, after the purchase, the fraudster will ask their victim to send funds to an account as "collateral". 

Alternatively, fraudsters may ask the victim to send funds to an account where the mined cryptocurrency is accumulating, supposedly to test the account or to collect the profit later. In reality, these profits will never materialise, and the victim's funds are already lost. 

Over the last few years, this scam has evolved. We've seen cases where fraudsters approach their victims intending to sell them "cloud mining services". As usual, this offer promises attractive high returns in exchange for an up-front payment. The promised returns rarely materialise, given the "cloud mining service" company doesn't own mining equipment or does not even exist.

Strengthening Our Defence

Our dedicated fraud team remains on high alert, proactively identifying and countering deceptive tactics. 

Our account managers are available around the clock with 24/7 support. They're here to assist if something feels off or you have questions about a transaction. We encourage our members to contact their account managers directly whenever they think something might be amiss.

What to look out for

It's important to know that with high-return investment scams, fraudsters often deceive their victims by showing screenshots of 'high returns' or encouraging them to install an app or access a website where the fraudsters control the displayed information. Typically, the victim sees an unrealistically high return on a small investment, leading to promises that investing their life savings would yield even greater returns, potentially making them millionaires. Such deceptive tactics are used to entice victims into investing larger amounts of money.

How to Stay One Step Ahead

Awareness is your first line of defence. Here are some pointers to keep in mind:

• Verify Before Trusting: Always double-check and verify any unsolicited offers or communications. Ads can take you to phishing websites that use similar logos and wording to legitimate banks and exchanges. 

• No Solicitation: Xapo Bank will never email individuals who are not registered with us, and we do not send invitations or special offers via email to non-registered persons.

• Due Diligence on Regulated Exchanges: If you are new to Bitcoin, be sure to do your research and make sure the exchange you have chosen is regulated. These exchanges generally require KYC (know-your-customer) information to open accounts and follow strict regulations to protect their customers.

• Check the Emails: Scammers might use emails that are very similar to Xapo Bank domains and use Xapo Bank logos in their signatures as well. Xapo Bank will only write to you from emails ending in @xapo.com, @mail.xapo.com, and @support.xapo.com.  

• Don’t Accept Free Money: There’s no such thing as a free lunch. Always be suspicious when someone offers great deals in short time periods — it is very likely they are trying to scam you. 

What to do post-scam?

If you suspect you've fallen victim to a scam:

• Immediate Action: Reach out to us at [email protected] or via in-app chat. Quick action can make a difference.

• Stay Informed: The more you know about these tactics, the better equipped you'll be to spot them in the future.

• Beware of Follow-up Scams: If someone claims they can recover your lost funds for a fee, be sceptical. It's likely another deception.

Remember, at Xapo Bank, we're committed to ensuring the safety of your savings. Together, we can navigate the crypto landscape securely.

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Disclaimer‍

This article is for general information purposes only and is not intended to constitute legal or other professional advice or a recommendation of any kind whatsoever and should not be relied upon or treated as a substitute for specific advice relevant to particular circumstances. We make no warranties, representations or undertakings about any of the content of this article (including, without limitation, as to the quality, accuracy, completeness or fitness for any particular purpose of such content), or any content of any other material referred to or accessed by hyperlinks through this article. We make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up-to-date.

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