Binance releases report outlining its findings on fraudulent online investment schemes

The cryptocurrency exchange’s risk intelligence unit, Binance Sentry advised crypto users to stay away from schemes that promise quick or exponential returns

Binance, one of the largest cryptocurrency exchanges in the world, published a report earlier this week explaining methods used by crypto scams to establish fraudulent credibility. The exchange’s internal risk intelligence unit, Binance Sentry, authored the report.

Using blockchain and open-source analysis, Binance Sentry has identified that investment schemes often promise quick or exponential returns on crypto investments to lure victims. The investigation has further revealed that these networks target and harass victims who have only limited investing experience.

The schemes also advertise high returns on investment schemes, not only in cryptocurrency, but also in foreign exchange (forex), binary options, or contracts for difference (CFDs). The report mentions that the Organized Crime and Corruption Reporting Project (OCCRP) had examined one such network operating out of a call centre in Kyiv.

Binance’s report on threats in the cyberspace comes after a recent Bitcoin scam targeting the residents of Winnipeg in Canada came to light. “These schemes sometimes operate under the facade of different, seemingly unrelated brands, and it is not uncommon for dozens of projects to be branches of the same malicious operation,” the report explained.

It further stated that while one of these branches might be crypto-specific, others might turn their attention to forex or CFDs. Regulators like the United Kingdom’s Financial Conduct Authority (FCA) or Italy’s Commissione Nazionale per le Società e la Borsa (CONSOB) have previously reported how a group of scammers can fool victims using various names.

Some scams even attempt to use false consumer organisations to compel their victim to shell out more money if victims get suspicious, the report claimed. They fabricate regulatory authorities and other government-affiliated services to prove their ‘legitimacy’ and reassure their victims into trusting the schemes of various brands.

“We have also seen the use of related ancillary services, including marketing outfits and law firms, human resources teams, and project rating sites. The goal of this is to cultivate credibility and further support these networks’ activities, many ostensibly doubling as legitimate operations,” the report elaborated.

Given the transnational nature of these schemes, victims are situated all over the world living in the jurisdiction of different law enforcement agencies, Binance noted. Thus, it increases the level of difficulty for authorities to conduct investigations and draw connections between the victims.

“We encourage our community to beware of promises of quick returns on investments and to always DYOR (do your own research) on services and projects before using them or investing in them,” Binance advised.

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