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Crypto scams cost more than ransomware, says FBI as US initiates civil forfeiture action

Reports have emerged about the US Attorney’s Office in Massachusetts initiating a civil forfeiture action aimed at recouping USD 2.3 million in cryptocurrency

According to the United States-based Federal Bureau of Investigation (FBI), hackers are making more money through confidence and romance scams than they are through ransomware attacks. However, the information from the law enforcement agency appears to be a little skewed.

According to the FBI, in 2023, people fell victim to multiple social engineering scams that resulted in the theft of USD 4.57 billion in cryptocurrency. Comparing that amount to the USD 3.31 billion that was stolen the year prior, there has been a 38% increase.

Ransomware In The Millions

The majority of the time, the scammers would pose as gorgeous women and have weeks-long chats with their victims. They used to advocate for group cryptocurrency investments or something similar. They would also recommend an app or cryptocurrency platform, which is typically phony and run by aggressors.

The scammers would attempt to continue the scam for as long as possible, by convincing the victims to “invest” as much as they can and even fabricating “gains” or money earned. Until they attempt to take their money out at some point.

At that point, the scammers move on to phase two, posing as the app’s customer service representatives and demanding payment of a “fee” for the victim to be able to withdraw their money. The more desperate they will try, the more they will lose.

Attacks with ransomware made a “miniscule” USD 59.6 million, in contrast to romance scams. Although it only includes ransomware incidents that were reported to the Internet Crime Complaint Centre (IC3), the FBI acknowledges that this information may not be the most accurate representation of the current state of ransomware. It also excludes the cost of business downtime.

“Regardless of whether you or your organisation decided to pay the ransom, the FBI urges you to report ransomware incidents to the IC3. Doing so provides investigators with the critical information they need to track ransomware attackers, hold them accountable under US law, and prevent future attacks,” the FBI concluded.

Biden Administration Acts Tough

Meanwhile, reports have emerged about the US Attorney’s Office in Massachusetts initiating a civil forfeiture action aimed at recouping USD 2.3 million (lost by 37 victims all over the country through online scams) in cryptocurrency. The measure, in a consolidated approach by federal agencies, is aimed at dealing with and reducing the impacts caused by internet scams, especially the ones involving digital currencies.

“The forfeiture seeks to recover a mix of digital currencies, including USD Coin (USDC), Tether (USDT), Tron (TRX), Solana (SOL), Binance Coin (BNB), Cardano (ADA), and Ether (ETH), held in two Binance accounts. These assets were identified and frozen in January 2024 after an extended investigation into a “Pig Butchering” fraud that resulted in the loss of USD 400,000 to a Massachusetts resident,” CoinGape reported.

In “Pig Butchering,” fraudsters undergo a stage of trust building with their victims, before persuading them to invest in nonexistent opportunities that result in financial losses.

“The action of the US Department of Justice was facilitated by a larger investigation into fraudulent schemes that prey on people through intricate online systems. These endeavours indicate the growing partnership of cryptocurrency platforms such as Binance and law enforcers in tracking and retrieving assets involved in criminal activities. The process not only consists of tracing the illegally gained funds but also finding the legal ways to send them back to their legitimate owners, illustrating how difficult and complex it is to control the digital financial environment,” CoinGape stated further.

“Concurrently, Tether was instrumental in helping the Department of Justice and the Federal Bureau of Investigation with the recovery and return of about USD 1.4 million in Tether (USDT) tokens. These were attached to a tech support scam most prevalent among old people, therefore showing the wider range of online frauds outside the cryptocurrency sector,” the media house observed.

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