Scammers Exploit Crypto Boom by Targeting Novice Asian Investors

Published on Unknown by Cryptovest Staff

The thriving cryptocurrency market in Asia is proving a boon to fraudsters and hackers, who target inexperienced investors in a region where financial literacy has not kept pace with the thriving economy.

In Japan, an estimated $520 million was lost to hackers when Coincheck got breached despite assurances from the digital currency platform that its system is capable of protecting itself against intrusion.

Hideto Fujino, president of investment advisory firm Rheos Capital Works, told Nikkei Asian Review:

"There is no such thing as a perfectly safe investment. Only fraudsters make such a promise. This has to become common knowledge, but it hasn't."

However, this rabid interest has also made India fertile ground for scammers. Authorities in the country have received hundreds of complaints from investors over alleged fraudulent virtual currency transactions, according to a Reuters report.

In South Korea, official news agency Yonhap said that authorities are investigating an alleged fraud affecting 18,000 people from 54 countries. They lost an estimated $250 million because of California-based Mining Max, which sells a machine for mining digital currency.

Crypto scams to rise this year

On Monday, we reported that criminal activities involving digital currencies are expected to increase this year. The scams are also becoming bolder and more sophisticated, as well as more personalized.

The five most common scams happening this year are:

  • Fake or deceptive ICOs: Scammers lure investors with fraudulent initial coin offerings.
  • Dubious exchanges: Fraud is perpetrated by shady platforms posing as legitimate exchanges.
  • Identity theft: Criminals steal personal details to commit fraud.
  • Fake giveaways: Scammers promise lucrative returns for small cryptocurrency contributions.
  • Pyramid schemes: Fraudulent schemes that rely on subsequent recruitment for profit.

Scams using Twitter were discovered late last month and involved using fake accounts. One of them purported to be that of Litecoin creator Charlie Lee and encouraged users to send a fraction of a coin to a certain address with a promise they would receive ten times the amount sent. Another fake account targeted the NEO platform. Lee and NEO alerted Twitter to the scam.