Crypto scammers using LinkedIn, Moody warns
(The Center Square) – Consumers are being warned by Florida Attorney General Ashley Moody about scammers using LinkedIn to target potential cryptocurrency investors.
Her announcement comes after LinkedIn published a security announcement to its users and after one Floridian lost her entire life savings of over $280,000 to a scammer who first contacted her through the professional networking site.
“Scammers try to build quick credibility with their targets in order to steal money or obtain personal information,” Moody said in a statement. “We are now seeing them utilize professional social media platforms, such as LinkedIn, in an attempt to appear experienced and knowledgeable. Once trust is gained, they begin to execute a multifaceted cryptocurrency-investment scheme.”
LinkedIn said it’s seen a rise in fraudulent activity over the last few months and received “questions on how we are working to prevent it.”
“First, our policies are clear on prohibiting fake profiles or fraudulent activity, including investment and financial scams,” the company said in a statement.
“Our teams use technology like artificial intelligence paired with teams of experts to stop the vast majority of content that violates these policies before it ever goes live – 96% of detected fake accounts and 99.1% of spam and scams are caught and removed by our automated defenses. We also collaborate with peer companies, policymakers, law enforcement, and government agencies,” it said to enhance security efforts.
Last year, LinkedIn removed 32 million fake accounts but its users still lost more than $1.6 million to cryptocurrency scammers contacted through its platform, CNBC reported.
Moody explains that the fraudulent scheme begins with the scammer creating a fraudulent LinkedIn account that initiates contact with a LinkedIn user. The fraudster offers to help the LinkedIn user make money by investing in cryptocurrency. The target believes the scammer, opens an account on a trusted cryptocurrency trading site and begins investing. However, over time, the fraudulent advisor convinces the investor to transfer his or her investment off of the trusted site to another site controlled by the scammer, who then steals the investor’s money.
According to the Global Anti-Scam Organization, many fake LinkedIn accounts associated with the crypto scam are based in Southeast Asia.
Although some in Congress have called for federal regulation of the crypto market, cryptocurrency exchangers and administrators are subject to the Bank Secrecy Act’s (BSA) money transmitter requirements. In 2013, the Financial Crimes Enforcement Network issued guidance stating that cryptocurrency exchangers and administrators are money transmitters and must comply with the BSA.
The U.S. handles the second largest volume of Bitcoin, roughly 26%, Corporate Compliance Insights reports.
Moody’s office published information warning of crypto scams earlier this year and also issued a new Consumer Alert warning consumers to never provide personal or financial information to strangers online, “no matter what platform they are using.”
The Securities and Exchange Commission has also issued investor alerts to warn consumers about potential fraudulent investment scams. And the IRS recently launched an international task force to investigate cryptocurrency-related crimes. The new Joint Chiefs of Global Tax Enforcement, or “J5,” is comprised of tax enforcement agencies from Australia, Canada, the Netherlands, the United Kingdom and the U.S.
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