With the FTX collapse leaving many users yearning for the return of lost funds, scammers are using the opportunity to take advantage of already injured victims by posing as government officials.
In a press release, the Oregon Division of Financial Regulation (DFR) warned crypto investors that fake applications and websites put up by scammers are aiming to take their money but give nothing in return. The DFR urged traders to make sure to “do their homework” before sending any of their funds to crypto trading platforms.
The DFR gave the example of a website that claimed to be managed by the United States Department of State. According to the DFR, the site declared that it was trying to help FTX customers to get their assets back. Because of this, the website was able to get information such as usernames and passwords from an investor. DFR Administrator T. K. Keen said:
“We have said this before, but if it sounds too good to be true, it probably is. We encourage everyone to do their homework and invest wisely, and be diligent in protecting their usernames, passwords, and other sensitive data.”
Keen also noted that there are many things within the crypto industry that look legitimate but are trying to take advantage of people. Apart from giving a warning, the officials also encouraged victims of crypto-related scams to file complaints with the office.
Meanwhile, executives involved in a South Korean crypto exchange fraud were sentenced to up to eight years in prison. Six officials involved in the $1.5 billion fraud that lured 50,000 investors by promising 300% returns were nabbed. However, three were not, as they claimed innocence to some charges and will defend themselves in court.