Cryptocurrency scams have been increasing rapidly over the last 12 months, Bank Windhoek Manager of Forensic Services, Johnny Truter has said.
Truter in a media statement on Wednesday said cryptocurrency scams have caused individuals and companies billions of dollars in losses and with Bitcoin the best known, cryptocurrency trading has attracted more fraudsters who exploit human weaknesses.
“Such weaknesses include being naïve and ill-informed. The anonymity of the trading provides fraudsters with the cover and negligible risk of being identified. Bitcoin scams are when people or groups attempt to trick or manoeuvre unsuspecting victims into sending them Bitcoin. Crypto scammers are not much different from the traditional financial swindler. They lure eager investors into a false sense of security, usually by offering incredible deals with impressive profits on their investment, only to disappear with their money,” Truter said.
He added that many international scams are much more sophisticated in their internet presence, creating a sense of comfort to invest with them.
Truter cautioned the public to be aware of possible cryptocurrency scams by raising red flags when possible scammers provide a written communication with limited company information like registration numbers or physical addresses to verify by further investigation.
“Investors must raise red flags when there is poor quality of websites, for example in the language used, and photos of directors and investors that cannot be verified by Google. Their marketing is done mainly on social media. Note that crypto companies are generally unregulated, and Bitcoin payments are irreversible because no central authority governs the authenticity of transactions. This means that ‘investors’ have no recourse if they are defrauded,” he said.
Truter added that a scammer can move the Bitcoin out of the fraudulent wallet, close it down, and disappear, once the key to a wallet is shared, the owner loses control of the wallet.
Source: Namibia Press Agency