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Chinese Cryptocurrency Fraudster Arrested in Bangkok

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Chinese Cryptocurrency Fraudster Arrested in Bangkok

A seventh member of a gang accused of duping people into investing in a fraudulent cryptocurrency scheme has been apprehended by police.

Baoxun Zhan, a Chinese national, was arrested outside Bangkok’s Government Complex on Wednesday after the Samut Prakan Provincial Court issued an arrest warrant.

Mr. Baoxun was charged on Thursday with conspiracy in public fraud and entering false information into a computer system.

Six alleged accomplices, including two Chinese nationals and four Thais, had previously been apprehended.

The suspect and his associates opened accounts on Facebook and the Tinder dating app together, posting decoy photos of attractive people in their profiles to entice people to invest in their cryptocurrency scam.

The gang told potential victims that their investment had made them wealthy.

Victims transferred their money to the gang and only realized they had been duped when they could not withdraw their funds or receive promised returns, according to Cyber police.

They reported to police that they had lost 3 million baht.

Arrest warrants were issued, and 6 gang members were apprehended.

Mr. Baoxun denied involvement during questioning, but investigators believed he was a key gang member.

The suspect was taken to Bangkok’s Samrong Nua police station for further investigation.

cryptocurrency

Beware of Cryptocurrency Scammers

Wormhole, a cryptocurrency exchange platform, lost $320 million in February 2022 due to a cyber attack. Aside from this attack, crypto scammers have stolen more than US$1 billion since 2021, according to a Federal Trade Commission report.

Digital currency is a type of currency stored in a digital wallet and can be converted into cash by moving it to a bank account.

Cryptocurrency is different from digital currency because it uses blockchain for verification and does not use financial institutions, making it more difficult to recover.

Even though cryptocurrency is a newer trend, scammers still use traditional methods to steal. Here are the most common cryptocurrency scams to be aware of.

Bitcoin investment plans

Scammers contact investors claiming to be experienced “investment managers” in bitcoin investment schemes. As part of the scam, the so-called investment managers claim to have made millions of dollars investing in cryptocurrency and promise their victims that they, too, will profit from their investments.

To get started, the scammers demand a fee. The thieves then steal the upfront fees instead of making money. Scammers may also ask for personal identification information under the guise of transferring or depositing funds and gaining access to a person’s cryptocurrency.

Another type of investment fraud involves the use of phony celebrity endorsements. Scammers use real photos and place them in fake accounts, advertisements, or articles to make it appear that the celebrity is promoting a large financial gain from the investment.

The sources for these claims appear legitimate, as they use reputable company names like ABC or CBS, a professional-looking website and logos. The endorsement, however, is a forgery.

cryptocurrency

Scams involving rug pulling

Rug pull scams involve investment con artists “pumping up” a new project, nonfungible token (NFT), or coin to obtain funding. Scammers take the money and then disappear with it. The coding for these investments prevents people from selling bitcoin after they purchase it, leaving investors with a worthless investment.

The Squid coin scam, named after the popular Netflix series Squid Game, was a popular variation of this scam. Investors had to play to earn cryptocurrency: people would buy tokens for online games and then exchange them for other cryptocurrencies. The Squid token’s value increased from one cent to around $90 per token.

Trading eventually ceased, and the funds vanished. As people attempted but failed to sell their tokens, the token value fell to zero. These investors provided the scammers with approximately $3 million.

Rug pull scams are also common with non-traditional assets (NFTs).

Romance swindles

Crypto scams are not uncommon on dating apps. These scams involve long-distance or online relationships in which one party takes time to gain the trust of the other. Over time, one party begins to persuade the other to buy or give funds in cryptocurrency.

The dating scammer vanishes after receiving the money. These schemes are also known as “pig butchering scams.”

Learn more about how romance scammers take advantage of the Ukraine war here.

cryptocurrency scams

Scams involving email

Phishing scams have been around for a while but are still prevalent. Scammers send emails containing malicious links to a fake website to obtain personal information, such as cryptocurrency wallet key information.

Never enter secure information from an email link to avoid phishing scams. No matter how legitimate the website or link appears, always go directly to the site.

Scams involving cryptocurrency giveaways on social media

On social media, there are numerous fraudulent posts promising bitcoin giveaways. Some scams use fake celebrity accounts to promote the giveaway to entice people.

When someone clicks on the giveaway, they are taken to a fraudulent site that requests verification to receive the bitcoin. Making a payment to prove the account’s legitimacy is part of the verification process.

cryptocurrency

Pyramid schemes

Ponzi schemes compensate older investors with the proceeds of new investors. To attract new investors, cryptocurrency scammers will offer bitcoin. It’s a scheme that goes in circles because there are no legitimate investments; it’s all about stealing money from new investors.

The promise of huge profits with little risk is the main allure of a Ponzi scheme. However, there are always risks with these investments, and there are no guarantees of returns.

The victim may lose this payment if they click on a malicious link, or they may have their personal information and cryptocurrency stolen if they click on a malicious link.

Counterfeit cryptocurrency exchanges

Scammers may entice investors with promises of a fantastic cryptocurrency exchange and possibly even some extra bitcoin. However, there is no exchange, and the investor only realizes it is a scam once they lose their deposit.

To avoid an unfamiliar exchange, stick to well-known crypto exchange markets such as Coinbase, Crypto.com, and Cash App. Before entering personal information, research and visit industry websites to learn more about the exchange’s reputation and legitimacy.

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How to Safeguard Bitcoin and Cryptocurrency

Here are some common red flags for cryptocurrency scams:

The promises of huge gains or double the investment; only accepting cryptocurrency as payment; contractual obligations; misspellings and grammatical errors in emails, social media posts, or any other communication; manipulation tactics, such as extortion or blackmail; promises of free money; out-of-place fake influencers or celebrity endorsements; minimal details about money movement and investment.

Scammers can be avoided by practising good digital security habits such as using strong passwords, using only secured connections or VPNs, and choosing safe storage.

Wallets are classified into two types: digital and hardware. Digital wallets are hosted online and are more likely to be hacked. Hardware wallets store information offline within a device, such as a cryptocurrency wallet and keys.

Because the Federal Deposit Insurance Corporation does not insure cryptocurrency, it must be kept secure. Never give anyone your wallet keys or access codes.

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