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FBI Alerts Public About Phony Entities Promising to Redeem Lost Crypto

The FBI recently released a warning about a new tactic that scammers are using to further deceive victims of crypto fraud. According to the agency, these fraudsters are pretending to be lawyers from nonexistent law companies. They contact victims through messaging apps and social media, offering services to help recover their lost funds, with the real aim of swindling more funds or personal information from them.

According to the FBI’s warning, the con artists frequently assert that they are approved by the Consumer Financial Protection Bureau (CFPB), the FBI or other governmental organizations. Victims find these fake lawyers through fraudulent websites designed to look authentic and seek help to recover their lost cryptocurrency.

According to the agency’s Internet Crime Complaint Center (IC3), victims of crypto scams who were taken advantage of by these phony law companies reported losses exceeding $9.9 million between February last year and February this year.

The fraudulent attorneys may request identity verification from their targets by requesting personal or financial details or by requesting an estimate of the money they intend to win from the initial fraud. Oftentimes, they demand upfront fees, with the remainder payable once funds are recovered. Victims might also be told to pay back taxes and other fees to retrieve their funds. Further, to make their schemes seem more credible, the scammers often reference real money exchanges and financial institutions.

The FBI’s advisory provides investors with various tips to assist them in guarding against this kind of crypto scam. First, when it comes to marketing for crypto-recovery services, the agency suggests being cautious. It advises doing extensive research on any business providing these services and avoiding those that use ambiguous terminology, have a poor internet presence or make implausible claims about recovering lost money.

The FBI made it clear that victims are not charged by law enforcement for their investigation of crimes. Additionally, the agency issued a warning that investors should avoid paying money or divulging any financial or personally identifiable information to an unknown person who contacts them claiming to be able to retrieve stolen crypto.

The FBI’s alerts underscore the necessity of exercising caution and diligence when responding to unsolicited offers of help, particularly in the specific domain of cryptocurrency investing. People can better protect themselves from falling for these sophisticated frauds by being informed and following the FBI’s advice.

Industry players such as Stronghold Digital Mining Inc. (NASDAQ: SDIG) can also work proactively with the authorities to strengthen existing security measures so that crypto losses arising from cyber hacks can be prevented.

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