The FBI warned cryptocurrency holders of a scam involving fake liquidity mining, saying these scammers have cost victims more than $70 million in combined losses since 2019.
Liquidity mining is an investment strategy that appears to reward investors for contributing a portion of their crypto assets to a pool, providing traders with the necessary liquidity to trade. And in return, each investor gets a percentage of the profit, thus making money without making active investment decisions. At least that’s what was promised.
The scammers were targeting Tether and Ethereum holders in this scam and were looking for victims by almost any means, including direct messages, social media, dating apps, messaging services, and even communication via acquaintances, according to an FBI alert issued this week.
Scammers would spend a few days or weeks engaging with their victims, then give them a quick tutorial on cryptocurrencies (if they didn’t already own any cryptocurrencies) and eventually convince them to mine liquidity by guaranteeing a daily return on investment of between one and three percent.
Scammers do not distinguish between individuals with or without cryptocurrency, and the program does not require any minimum investment. That is, it allows victims to invest as much digital currency as they want.
After convincing their targets to link their crypto wallets to fake liquidity mining apps, scammers move the digital coins into their own wallets, eliminating victims’ funds.
After realizing that their money was stolen and not actually invested, victims often contact the wallet provider or customer service portal on the scam app. According to the FBI, “persons claiming to be customer service representatives for scams can offer one of several explanations as to where the money went and why it is no longer available, resulting in the victim claiming to have to deposit additional funds to get their money back.”
Not surprisingly, depositing more money doesn’t get victims their money back…
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