The Federal Bureau of Investigation (FBI) has warned crypto investors of a scam using an investment strategy called cash mining. “This scam was responsible for more than $70 million in combined losses to victims,” the law enforcement agency said.
FBI warns of crypto-liquidity scam
The Federal Bureau of Investigation (FBI) issued an investor alert on Thursday warning crypto owners of a scam targeting them. The law enforcement agency announced:
The FBI is issuing this public service announcement to warn US citizens of a cryptocurrency scam using an investment strategy called Liquidity Mining in which scammers exploit cryptocurrency owners, typically tether (USDT) and/or ethereum (ETH).
“Cash mining is an investment strategy used to earn passive income with cryptocurrency,” the FBI explained. “In legitimate liquidity mining operations, investors invest their cryptocurrency in a liquidity pool to provide traders with the necessary liquidity to conduct transactions. In return, the investor receives a portion of the trading fee.
Claiming to use this investment strategy, “scammers trick victims into linking their cryptocurrency wallets to scam cash mining apps. The crooks then wipe victims’ funds without notification or permission from the victim,” the FBI warned.
“Scammers approach potential victims through an unsolicited direct message (DM) on social media, dating apps or messaging services such as Facebook, Instagram, Twitter, Linkedin, Whatsapp, etc.”, adds the ad.
Victims of a cash mining scam move cryptocurrency from their wallets to the cash mining platform, the FBI has detailed. After investing, they often see the purported returns on a fake dashboard. Believing that their investments are successful, they buy additional cryptocurrency. Scammers eventually transfer all stored cryptocurrencies and investments made to a wallet they control.
The FBI noted:
Since January 2019, according to the FBI’s Internet Crime Complaint Center (IC3) and open source, this scam has been responsible for more than $70 million in combined losses for victims.
What do you think of the liquidity mining scam targeting crypto owners? Let us know in the comments section below.
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