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Technological advancement has equipped the culprits with different ways to perform cryptocurrency-related financial crimes. These crimes can be in the form of theft, money laundering, hacking, etc. And there’s no end to that because fraudsters keep inventing new ways and crypto crime trends to stay ahead of security and law.
Earlier this year, law enforcement seized $3.4 billion in assets in the US Silk Road case, implying the abilities of scammers. Thousands of such cases on multiple levels happen every single year. Last year only, such crypto scams led to more than 2 Billion in loss.
Implementation of better technology, AI, tools, and software, hackers have become pros at performing such risky frauds, causing millions of dollars in losses.
In this blog, let us discuss the most common top 5 Crypto crime trends and how to be safe from them.
Top 5 Crypto Crime Trends
Though the number of crypto crimes has increased, the regulators have also set their ways to identify the crimes the earliest and deal with them on time. The regulation has also strictened the fines and jail time for such crimes.
Amir Bruno Elmaani, who proposed the Oyster Pearl Token, has been sentenced to 5 years in prison for his income tax fraud. On the other hand, Ian Freeman is sentenced to 8 years for his $10 Million worth of Bitcoin laundering. The most recent example is Sam Bankman, sentenced to 25 years of jail time for the FTX bankruptcy and money laundering.
Though these crypto crime trends keep changing with time, a similar technique or pattern is used most of the time. In 2024, the most dominating crypto crime trends are artificial intelligence thefts, smishing, ICO fraud, trading bot scams, and pump-and-dump schemes.
Artificial Intelligence Thefts
Artificial intelligence technology has grown a lot over the past year or two. Multiple software tools can do voice copying, videos, deepfakes, or even create original like fake documents. These AI tools’ unique features and manipulation abilities easily have increased the crypto crime trends.
Other than this, another form of crime is in the form of losing personal information. A few AI tools have been reported stealing users’ personal information, leading to blackmailing and theft.
Smishing/ Phishing
Smishing Or Phishing scams are where fake mobile text messages, links, downloads, and fake transactions have caused the loss of cryptocurrencies. Usually, in such cases, the person behaves like your known family or friends, asking you to help them financially or enroll in any giveaway, which is a scam.
People have also become victims of airdrop scams where they receive invitations to join free airdrops for well-known cryptocurrencies, leading to the theft of wallet and private key information.
Initial Coin Offering Fraud
Initial Coin Offering (ICO) has been the way for crypto startups or companies to gain funding and capital to start a business. But the culprits have used that to run scams. These scammers launch a fake company and create the ICOs after carefully creating the real like websites, social media pages, and whitepaper to promote their businesses and show authenticity to trick users into that ICO.
Such ICOs often claim high returns and better services to users, gaining their trust and investment. Once the purpose of collecting money is fulfilled, these scammer companies disappear in thin air.
Trading Bot Scam
Various platforms have introduced these trading bots to help investors eye their investments and monitor the crypto market. Though it’s been a helpful tool for some, fraudsters have turned them into scamming bots to run investors’ wallets empty.
If not, the other scenario will be the inadequate performance of these trading bots, which run with poor execution with poorly built algorithms, leading to losses.
In some situations, the fake investors build their profiles and showcase their fake gains. They end up collecting money from the general public and trading their money while promising to distribute the profit. However, major happenings lead to Ponzi schemes and losses.
Pump & Dump Schemes
Token pump-and-dump groups and schemes have been part of the crypto industry from the very start and seem to be not ending anytime soon. In these schemes, the fraudsters manipulate the token price by bulk buying or selling, providing misleading information to interfere with the token price.
In both the cases of the price surge and price dump, the fraudsters end up with hefty price profits and the rest with losses.
How To Be Safe From Such Crypto Crime Trends
The fraudsters have been continuously improving their technique with time, but there are a few basic steps an investor can take to be safe from such crypto scams.
The first step is to be fully part of the industry, knowing what’s happening. With this, the person can identify what’s new and connect with peers to gain knowledge before investing and trusting any tool, crypto exchange, or even ICO.
The next step is to keep the safely stored crypto assets in a hardware wallet or trustable exchanges with two-factor authentication.
Most importantly, not becoming a part of any group or activities, airdrops, or even rewards directly offered through social media platforms. A good presence of mind and proper research before making any decision can help out a lot in staying safe from the majority of scams.
Conclusion
With innovations and tools, it is becoming harder to identify crypto scams. However, understanding the ongoing crypto crime trends can help to identify these fraudulent activities. The crypto investor should be careful of unknown links and tools, investment options, and random recommendations.
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