Fraudsters dupe unsuspecting people on false pretense. They convince their victims of the authenticity of their projects. Unfortunately, inadequate regulations have made the cryptocurrency market vulnerable to such scams. The fraudsters can take advantage of people who want to invest in new crypto projects.
Thousands of crypto investors were duped in the recent bitcoin scam targeted at UAE. The perpetrators set up a fake bitcoin trading platform which they falsely linked to Sheik Mohamed bin Zayed, Abu Dhabi’s Crown Prince. They claimed that “Bitcoin Loophole,” the fake bitcoin trading platform was endorsed by the Crown Prince and Deputy Supreme Commander of the Armed Forces.
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In a Facebook post shared by thousands of users, the fraudsters claimed that users of Bitcoin Loophole can make $13,000 per day. With the quote, “My way of giving back to the people” purportedly from the Crown Prince, they lured their victims. The National, UAE site news, reported on June 30 that Facebook has deleted the fraudulent sponsored ads. Unfortunately, thousands of investors had lost their money to the criminals before the social media giant took down the posts.
The fraudsters who were based in Argentina and Ukraine convinced users of riches within a week of using the fake trading platform. Bitcoin Loophole assures users that high profit is possible if they use automated Bitcoin trading bots. They demanded an up-front donation of $272 (1000 UAE dirhams) from their victims. In addition to the money lost to the scammers, the victims also handed their personal information over to the criminals.
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In addition to their claims about Bitcoin Loophole, the perpetrators used real economic facts to convince their victims. They also used fake quotes from Bill Gates, founder of Microsoft, and images of a US-based journalist. Fraudsters have been using famous people and celebrities to promote their fraudulent schemes and gain the trust of their victims.
In a statement released by the Abu Dhabi Media Office, the public was cautioned to be on guard against scams. It emphasized that genuine investment schemes are announced via official channels by government officers. However, a Facebook spokesperson disclosed to “The National” that impersonation on Facebook violates the platform’s community standards. The Facebook official revealed that the social media giant has a team that detects such fraudulent investment schemes. This team blocks scams once they are discovered.
Facebook banned cryptocurrency-related ads in January 2018. Being the first social media platform to take such an action, Facebook pointed out that it bans ads that use deceptive or misleading promotional practices. However, the social media giant indicted cryptocurrencies and specifically mentioned initial coin offerings.
Fraudsters also use fake statements from famous individuals to promote their false cryptocurrency schemes. Last year, they used a fake endorsement from Elon Musk, Tesla Founder, to attract people to their scheme. The criminals changed the name of verified hacked Twitter accounts to Elon Musk. Their intention was to convince their victims that the tech mogul was promoting the fake crypto investment scheme.
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In another development, John De Mol sued Facebook early last month for damages to his reputation. The Dutch billionaire claimed that fraudsters used his image for crypto ads without his permission. Unfortunately, they duped their victims about $1.9 million from this particular scam.