Coinbase Raises Alarm on ‘Pig Butchering’ Crypto Investment Scams

August 18, 2022 0 Comments

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<p>American cryptocurrency exchange, Coinbase, has raised concern over increase in the number of romance-investment scams called ‘pig butchering’ or ‘Sha zu pan'.</p><p>This type of scam occurs when a scammer sources for victims through dating apps and social media and builds “trust with their victim, sometimes over a long time period of weeks or months.”</p><p>The Coinbase Global Investigations, Trust & Safety, and Threat Intelligence Teams expressed worry on the rising popularity of this scam in <a href="https://blog.coinbase.com/security-psa-sha-zhu-pan-pig-butchering-investment-scams-9998ee163cae">a security PSA </a> released on Thursday.</p><p>Coinbase explained, “Recently, a noteworthy increase in scams purporting to be foreign exchanges or crypto trading platforms that are spread by scammers who use dating apps to lure victims. </p><p>“While <a href="https://www.financemagnates.com/fintech/is-the-uk-fca-doing-enough-to-stop-investment-scams/" target="_blank">investment scams</a> and romance scams are not unique to the cryptocurrency ecosystem, the irreversible nature of cryptocurrency transactions can make these scams devastating.”</p><p>The publicly-traded company, however, noted that it works closely with law enforcement actors across the world to protect its customers from different forms of targeted cyber attacks.</p><p>Modus Operandi</p><p>For this nature of scam, <a href="https://www.financemagnates.com/tag/coinbase/" target="_blank">Coinbase </a>explained that fraudsters typically claim that they have received enormous financial gains from a cryptocurrency investment and convince their victims to also invest in such schemes. </p><p>At other times, the scam might come in the form of offering to teach victims how to trade successfully.</p><p>The distributed company explained, “Victims are directed to visit a fraudulent website that often looks like a legitimate <a href="https://www.financemagnates.com/terms/t/trading-platform/" target="_blank">trading platform</a> and coached to deposit funds into an account that is controlled by the scammer.</p><p>“Some victims even receive a small amount of funds that are claimed to be ‘returns’ on their investment to entice them to invest even larger sums.</p><p>“When the victim tries to withdraw funds from the site, they are then told they owe a tax payment or service fee before their funds will be released in an effort to further extort them for money.”</p><p>Coinbase noted that its teams identify and add addresses associated with scams to its products’ blocklists to shield its customers. </p><p>The exchange urged its users to be vigilant against this type of scam.</p>

This article was written by Solomon Oladipupo at www.financemagnates.com.

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