The world of cryptocurrency can seem exciting and full of opportunity, with promises of high returns and financial freedom. But behind these promises often lurk sophisticated scams designed to steal your money. Police Scotland is warning the public about the significant risks associated with cryptocurrency investments and how to spot the red flags of a scam.
We’ve seen cases where people have been drawn in by what appears to be a genuine investment opportunity. In a recent case, a North East male, lost over £150,000. A common scenario begins with a simple advert on social media. It might show a young, successful person claiming to have made a fortune in crypto, or it might promise guaranteed returns with minimal effort.
How the Scam Unfolds
1. The Hook: The victim clicks on an enticing advert on social media, fills in a form with their contact details, and is quickly contacted by a friendly, professional-sounding individual. They’ll use a seemingly legitimate company name and a professional tone to gain trust.
2. The Initial Investment: The scammer will persuade the victim to make a small initial investment—often a few hundred pounds. They’ll set up an online account for the victim, which shows a small balance and some impressive-looking graphs. At this stage, the money is not invested; it has been stolen.
3. The “Financial Advisor”: A new person, a so-called “financial advisor,” will take over. They will guide the victim through setting up a legitimate crypto exchange account, like Crypto.com. They’ll instruct the victim to transfer money into this account and then to a specific “wallet address” for the scammer’s fake company.
4. The Illusion of Growth: The scammer’s website will show the victim’s investment growing rapidly, sometimes to tens or even hundreds of thousands of pounds. This is a complete fabrication designed to build false confidence and make the victim believe their investment is genuinely successful.
5. The Withdrawal Trap: When the victim asks to withdraw their supposed earnings, the scam begins to escalate. They’ll be told they must pay various “fees” to access their money. These fees can be for things like “verification,” “anti-money laundering,” or even “liquidity proof.” The fees are often a percentage of the fake balance, making them seem reasonable to the victim.
6. The Final Push: As the victim pays more and more fees, the scammers apply pressure and use emotional manipulation. They might claim that the withdrawal is at risk or that they could lose everything if they don’t pay the next fee. They may even disappear for a while or change contact details to cover their tracks. The money paid for these “fees” is, in reality, another loss for the victim.
7. The Hard Reality: Eventually, the scammer’s website vanishes, the “advisor” disappears, and the victim is left with nothing. The money they believed was growing never existed. Their total loss includes all the initial investments and every single fee they were manipulated into paying.
How to Protect Yourself from Crypto Scams
If you believe you have been a victim of a cryptocurrency scam, report it immediately to your bank and to Police Scotland via 101.
