The strange case of crypto identity theft

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“On my TikTok there is constantly a new Fred Schebesta coming in and asking people to send them on WhatsApp about a hot new cryptocurrency project,” said Finder boss Fred Schebesta (the true).

“It sounds like a scam, and it almost always is, but it’s very difficult to stop the bots. It happens all the time.

“I don’t accept phone calls, I don’t click on e-mails, I no longer answer text messages. “

Researcher CEO Fred Schebesta

Like Green, Schebesta had his identity stolen and used to sign up to buy now, pay for products later. Particularly ambitious crooks also attempted to set up PO boxes in his name, tactics which forced the founder to be very careful when taking calls and messages.

“I don’t take phone calls, I don’t click emails, I don’t respond to text messages anymore unless I know who you are,” he says.

The Australian Competition and Consumer Commission (ACCC) generally runs a tight ship when it comes to tracking down and alerting people to scams, with its ScamWatch division tracking 18,000 different scam reports alone. in November.

However, the regulator admits that its data on the type of impersonation scams affecting the crypto space is limited. “It’s not the most common form of these scams that we see, but it is certainly among those that have been reported,” said Vice President Delia Rickard.

Rickard says the regulator has a handful of case studies where victims have fallen for these scams, providing examples where high-profile crypto figures, such as Ethereum founder Vitalik Buterin and Tesla founder Elon Musk, were imitated, with crooks taking between $ 2,000 and $ 6,000 in cryptocurrency from victims.

Finder’s Fred Schebesta had his ID stolen and used it to sign up to buy now, pay for products later.Credit: Louise Kennerley

“That’s a lot of money to lose,” she says. “The whole investment theory that ‘don’t put all your eggs in one basket’ seems to go away when people get involved in crypto.”

She sees these scams as a new-age version of the classic celebrity identity theft scam, where crooks attempt to lure victims into fraudulent investments with the supposed backing of a prominent celebrity. which has become easier to achieve due to the unregulated and unpredictable nature of the cryptocurrency space.

“Since you can have scammers operating on legitimate exchanges, I think it’s very difficult for people to know how to go about it,” she says. “So therefore, they see names that they trust and think it’s a safer decision.”

The ACCC hopes to educate more people about the danger of these scams and is also working closely with banks in an effort to prevent money being transferred to scammers before it is too late. However, the power of the regulator beyond that is limited, leaving much of the action to social media platforms that provide a way for these crooks to operate.

When the crypto boom started, it was mostly Twitter. However, the company has taken significant steps to prevent these scams from spreading, with a spokesperson saying it “is constantly adapting to the evolving methods of bad actors.” In Australia, promoting crypto products on Twitter is only allowed with the platform’s prior permission.

Many of these crooks have since moved on to more private services like Telegram and Discord, where they can send messages to potential victims one-on-one.

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A spokesperson for Discord said the company is taking action against any illegal activity on its app, including banning users and shutting down servers. The company has also deployed various scam protection tools such as suspicious link detection and services that monitor suspicious activity of new users.

Likewise, a spokesperson for Meta – Facebook and Instagram’s parent company – said the company has a team dedicated to identifying and preventing these types of scams.

“While no app is perfect, we continue to investigate new technologies and methods to end these scams and the people behind them,” they said.

However, the sad reality of the cryptocurrency industry is that it is much more difficult to prevent scams compared to the traditional financial space, as the key principles of decentralization and anonymity are both this. which makes cryptocurrency great, but also allows crooks to thrive.

Rickard says crypto scams, in general, have “exploded” throughout COVID as more people are stuck at home on their computers. She attributes this in part to the hype associated with the industry, with some desperate investors willing to take risks for fear of missing out on the crypto boom.

“I really think we’re seeing this mentality of people seeing everyone who made their fortune in the first boom,” she says. “So they really want to be in the next best, big thing. “

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