A new crypto scam attracting new investors has been tracked down by a cyber security firm.
This scheme is called “liquidity mining” and criminals use the complexity of crypto-trading as a shield for robbery.
The cryptocurrency space is ripe with scams and hacks.
The Washington Post reported that Americans lost an estimated $750 million in crypto scams last year.
According to the FBI, this monstrous amount is almost double the amount taken in physical robberies.
Crypto scams are typically built on lies where physical thefts are treated as confrontations – misguided crypto victims often turn over their funds voluntarily only to realize that they have subsequently been duped.
TechRadar wrote that for a decentralized currency to trade, “there must be a pool of liquidity”.
To create a pool of liquidity, legitimate cryptocurrency administrators will ask investors to lend some of their tokens to the pool in exchange for a small recurring bonus – this is achieved through a coded digital protocol known as a “smart contract”. Is.
Scammers are developing fake cryptocurrencies and falsifying records to make them appear as an increase in value.
They then target new investors to connect to their digital wallets, sign a smart contract, and contribute to a liquidity pool – a pool that doesn’t actually exist.
Reports suggest that some criminals recruit victims using the catfishing angle – an attractive woman sending an unsolicited direct message containing a link to a money-making opportunity that is too good to be true.
“Activating the link would establish a smart contract with the scammer and the user might not know it,” a liquidity mining theft victim told the Global Anti-Scam Organization.
“Victims will not be fully informed of what the smart contract they just entered actually does,” he said. “Once the smart contract is activated, scammers can steal USDT whenever they want.”
Scammers launder money through other cryptowallets, exchanges and disappear into cyberspace.
The liquidity mining scam is an elusive one – the Post notes that $66 million in scams created after it could have been stolen.
A Reddit page called r/eth_liquidity_scam has several posts for crypto-enthusiasts to flag and discuss recent changes to the scam.
This article originally appeared on sun and was reproduced here with permission.