The price of Bitcoin is surging to unprecedented heights, a monumental event for investors, symbolizing mainstream acceptance and significant financial opportunity.
In his first week back in office, President Donald Trump issued a series of executive orders, including one titled “Strengthening American Leadership in Digital Financial Technology.” This order establishes a working group to review digital asset regulations and proposes the creation of a national Bitcoin reserve. The BITCOIN Act of 2024, as well as SEC approval for BTC and ETH ETFs, has further amplified the spotlight on cryptocurrencies, aiming to position the U.S. as a global leader in the market. The Act promotes the establishment of a national Bitcoin reserve, appoints crypto-friendly regulators, and encourages widespread adoption of digital assets.
A few days ago, Donald Trump signed an executive order to establish a strategic reserve of cryptocurrencies by using tokens already owned by the government, disappointing some in the market who had hoped for a firm plan to buy new tokens.
The order sent the price of Bitcoin down by around 5% to $85,000. In early European trading on Friday, bitcoin has recovered to trade at $89,200.
Regarding this, FACTWATCH Nigeria has observed a sharp rise in crypto-related scams exploiting recent events like the launch of a Trump NFT. These scams primarily impersonate legitimate Bitcoin Wallets, such as Ledger and Binance, utilizing advanced techniques like AI chatbots to masquerade as support agents in attempts to gain access to the target’s wallet.
Given the irreversible nature of blockchain and cryptocurrencies, these developments underscore the importance of evolving regulatory clarity, as opposed to traditional fiat currencies like the U.S dollar or the Nigerian Naira.
The FBI reported a significant increase in cryptocurrency-related scams, with losses exceeding $5.6 billion in 2023, as scammers exploit the Fear of Missing Out (FOMO) surrounding Bitcoin’s rise. The FBI’s figure encompasses a broad spectrum of cryptocurrency-related fraud, including investment scams, tech support schemes, and romance scams, which collectively swindled victims out of billions.
Background
Cryptocurrency is a type of digital currency that generally exists only electronically. You usually use your phone, computer, or a cryptocurrency ATM to buy cryptocurrency. Bitcoin and Ether are well-known cryptocurrencies, but there are many different cryptocurrencies, and new ones keep being created.
People use cryptocurrency for many reasons — quick payments, to avoid transaction fees that traditional banks charge, or because it offers some anonymity. Others hold cryptocurrency as an investment, hoping the value goes up.
Cryptocurrency is stored in a digital wallet, which can be online, on your computer, or an external hard drive. A digital wallet has a wallet address, which is usually a long string of numbers and letters. If something happens to your wallet or your cryptocurrency funds — like your online exchange platform goes out of business, you send cryptocurrency to the wrong person, you lose the password to your digital wallet, or your digital wallet is stolen or compromised — you’re likely to find that no one can step in to help you recover your funds.
What To Know About These Scam Methods
Phishing schemes
The recent inauguration of President Trump, alongside his crypto endorsement and launch of a cryptocurrency with his namesake, has fueled a wave of phishing schemes leveraging Donald Trump’s name. Fake “digital trading cards” of NFTs like the one shown below, and other crypto-related offerings have emerged for enthusiasts drawn by the allure of exclusive NFTs and supposed official partnerships.
These schemes feature professional-looking websites and emails impersonating legitimate Bitcoin platforms, enticing users to interact with malicious links and approve fraudulent transactions. This surge in scams highlights how quickly actors adapt to the public interest, using high-profile figures and events to lend credibility to the deception.
Impersonation scams
Attackers frequently impersonate support agents or representatives of well-known companies to deceive users into handing over sensitive credentials or transferring funds. These scams often create urgency, claiming issues such as account compromise or flagged transactions. By leveraging the reputation of large brands to gain access to the seed phrase of a wallet, attackers bypass transaction approvals, gaining unrestricted control over the wallet. This allows them to transfer funds and assets faster than you can say “cold storage”.
Scammers also launch a website posing as Ledger, a well-known cryptocurrency wallet. They then sent phishing emails, complete with logos, fonts, and design elements closely replicating Ledger’s branding (as shown in the images below). The email purports to be a security notice and directs users to click on a button labeled, ‘Verify My Recovery Phrase’. This link sends users to ledgerprotecthub[.]com, a fake website that was recently created to steal account credentials and funds. Users who entered their seed phrase under the guise of “verifying” or resolving a fabricated security issue, unknowingly gave attackers full access to their wallets.
Cloud mining
Cloud mining allows individuals to lease hardware or hash power from remote data centers, allowing them to mine cryptocurrency without managing physical equipment. This sector has become rife with fraudulent schemes, with scams revolving around promises of automated crypto mining with high and unrealistic payouts, luring victims with enticing rewards and compelling testimonials. Victims are often required to provide personal information or make an upfront payment, only to find the promised earnings never materialise. A notable instance of fraudulent activity is the case of HashOcean, a supposed cloud mining service that claimed to handle large-scale mining operations. Despite its professional online presence, HashOcean was revealed to own no mining infrastructure and operated as a Ponzi scheme, disappearing with investors’ funds
Airdrop scams
Legitimate airdrops are used in blockchain projects to distribute free tokens, often to promote new tokens or reward loyal users. Fraudulent airdrops exploit this concept and the appeal of “free crypto”, enticing users to perform wallet actions or pay small fees to receive tokens. Targets may notice tokens in their wallet and attempt to swap them for more desirable ones, only to find that the process fails. This might lead them to a block explorer, where they encounter a message instructing them to claim their tokens through a third-party website. The attacker’s ultimate goal is to either gain access to the wallet or steal funds directly.
Fake crypto apps
Actors develop fraudulent applications that closely resemble legitimate crypto wallets and exchange platforms, distributed on unofficial app stores or deceptive sites, aiming to dupe users into downloading them. Once installed, these apps steal sensitive information, such as recovery phrases, private keys and identification details, leading to unauthorised access and potential theft.
Phone scams
Attackers employ various communication platforms, including SMS, phone calls, and emails, to impersonate support teams of exchanges or wallet providers. They create a sense of urgency by claiming suspicious activity on the user’s account, pressuring them to share sensitive information such as seed phrases or 2FA codes.
Extortion
These guys send threatening emails or messages claiming access to compromising personal information about the target. They coerce victims into paying cryptocurrency ransoms to prevent the release of fabricated or stolen data. These scams also often leverage information from data breaches to appear more convincing.
