FBI warns crypto owners not to fall for liquidity mining scam

Since the launch of Bitcoin in 2009, crypto became an interesting investment model. Cryptocurrencies aimed to enable easy peer transactions. With the growing increase of crypto interest many investors tried their luck in it. However there are still legit and trusted platforms, one of them is NEO and articles are discussing how it is different and unique from its competitors.

Today, there is more than $3 trillion worth of investments in the global market. The total cryptos have increased by more than 10k+. All cryptocurrencies work on both blockchain technology and decentralized finance model.

The concept of blockchain technology is pretty simple to understand. Each user transaction is broken down into individual units of blocks. These blocks take unique reference numbers that do not trace back to their original users. These transactions are stored as a block of chains in the public network. The admin users within the network control the flow of information. It eliminates the need for regulatory agencies to complete user transactions. The transactions are undertaken on the web with the use of the digital wallet. The tokens transfer from one account to another user. Recipients can in turn liquidate their holdings to native currency.

Understanding cryptocurrency scams in the industry

With the growth of cryptocurrency, there is also an increase in the scams around it. Yes, you heard it right. There have been various incidents of crypto scams from across the globe. TeslaCoin website There have been scamming or phishing incidents on the web. Many investors have fallen trapped in such scamming incidents.

To understand this in detail, let us understand a few common scamming incidents in the crypto industry.

Investment schemes

Scammers reach out to investors luring them into long-term investment schemes. Scammers ask for an upfront fee with a promise to provide you with a million profit. Investors have also been informed that scammers had asked for certain personal information. It includes details like identity cards, bank account details, and KYC.

Rug Pull

This is a popular investment scamming. During such cases, the investors call you up to provide you with information about a new project. The most popular and recent one in this scam is the squid scam. The scam is famous for its popular series of the same name. People were lured to buy the token online and exchange the same for another coin. The price of squid coin NFT went up to $90 per token.

Scamming on dating apps

Yes, this is another way of scamming interested investors. Many dating apps use crypto tokens to complete a transaction. In such scamming, some people enter into long-term relationships with you. Once you are convinced about the identity, the other person demands a crypto token.

Understanding liquidity mining scam

This is another popular and recent crypto scamming. The FBI has warned investors to not fall for this scam. The regulatory agency is convinced that there are more than $70 million in losses.

The liquidity mining strategy lures its users differently. It presents its users with the ability to reward its investors. The victims need to just contribute a part of their assets to this investment pool. It will allow investors to liquidate their holdings at per user’s convenience. Each investor who is part of this scheme receives a percentage of their profits. It will allow users to earn money on the go. This is another model of passive income that scammers promise.

The current scamming is mainly aimed at Ethereum and Tether users.

Scammers identify their victims through various sources. It ranges from social media apps, dating sites, and even direct messages.

The scammers reach out to you directly and build a relationship with you. This could mean a few messages or conversations. The scammers do not differentiate between investors and non-investors. The scammers also do not need you to invest any particular amount. They coax you to make your investment that goes into their pool.

Once your investment is complete, the scammers make you link your digital wallet. The scammers will wipe out your entire holdings in a single go.

It takes time for an investor to realize the fraudulent activities. The investor tries to reach out to their wallet service providers. Customers who attend to such fraudulent queries pose themselves as helping agents. Various explanations include the need for additional funds to be raised with investors. It takes time for an investor to realize the scam involved.