Binance releases report discussing the psychology of fraudulent cryptocurrency schemes

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  • A new report by Binance sheds light on how scams targeting cryptocurrency investors attempt to gain credibility. 
  • The exchange noted that it is common for multiple scams to be branches of the same malicious operation.

Binance has recently published a report that outlines how scams targeting cryptocurrency investors attempt to gain credibility. The exchange noted that its Binance Sentry – an internal risk intelligence unit – has observed reports of fraudulent investment schemes promising quick or exponential returns on cryptocurrency investments. In addition to cryptocurrencies, the schemes also advertise investment services in foreign exchange (forex), binary options or contracts for difference (CFDs).

These schemes have often been the subject of regulatory warnings and sometimes operate under the facade of multiple, seemingly unrelated brands. However, it is not uncommon for several projects to be branches of the same malicious operation, added Binance. 

A few fraudulent entities go as far as to create “consumer organizations” to manipulate their victims into spending more money once they become suspicious of the original fraud. Scammers often impersonate regulators and state agencies to earn the trust of investors. Binance Sentry also noted that the nature of many of the scams makes legal action against them harder. 

[Scam] victims are often situated all over the world, living in jurisdictions that are different from the pseudo-services to which they fall victim. […] As one may expect, this not only results in an increased level of difficulty for law enforcement investigations but also complicates the process of establishing connections between victims.

The report comes just a few weeks after a Bitcoin scam targeted the residents of Winnipeg, Canada. 

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