Vermont citizens were recently warned by the state’s financial regulatory agency, the Department of Financial Regulation (DFR), about the increasing incidence of cryptocurrency investment scams on widely used social media platforms.
The Vermont Department of Financial Regulation (DFR) attributes the increase in cryptocurrency scams to phishing scammers employing increasingly sophisticated and tailored strategies, using layers of deception to lure in victims.
As a result, Vermont residents have been urged to immediately report any instances of fraud to help minimize financial losses and make it easier to identify and pursue perpetrators.
Instagram: Best platform for crypto scams as identified by US agency
74-year-old Naum Lanzman fell victim to a crypto scam conducted through two prominent social media platforms, resulting in the loss of his life savings, which amounted to $340,000, just in the past month.
Related reading: Britain rejects proposal to regulate cryptocurrency as gambling
Lantzman found himself drawn towards cryptocurrency investments as his life took an unexpected turn due to the impact of the pandemic. While casually scrolling through his social media feed, Naum Lantsman came across a post from a company called SpireBit.
His initial encounter with a crypto scammer took place on Instagram, which the FTC has identified as the leading platform related to cryptocurrency fraud.
Intrigued, he decides to get involved with the content, starting a line of communication with the crypto fraudster. The post portrayed SpireBit as an “international financial intermediary” involved in cryptocurrency transactions, luring Noam into the scam.
After the initial encounter, a company representative who called himself Pavel reached out on messaging app Telegram. Written in Russian, Lantzman’s native language.
Pavel and Lantzman began speaking regularly, discussing family matters and their shared background in the former Soviet Union. All of these interactions took place over Telegram.
Over the course of several days, the CEO of SpireBit put pressure on him, eventually convincing Lantsman to make investments against his will. Starting with $500, Lantsman eventually invested his entire savings, which totaled over $340,000, into a SpireBit account.
Lantzman’s account showed that money was being deposited and increasing. However, the graphs showing earnings growth were completely fake.
When he tried to withdraw money from his account, SpireBit presented a forged document, purportedly from Britain’s Barclays Bank, which demanded a 2% fee as a “security measure”. A Barclays representative later confirmed that the document was forged.
Although Lantzman knew about the cryptocurrency scams from previous accounts, he said he never expected to fall prey to such criminal activities.
The Vermont Department of Financial Regulation (DFR) highlights that fraudsters use ever-evolving tactics, such as forging bank documents and engaging in friendly conversations to carry out their fraudulent schemes.
To combat these tactics, vigilance and thorough background checks are essential. Investors are advised to do extensive research before investing money in digital asset platforms.
Featured image from UnSplash, chart from TradingView.com