SINGAPORE - The number of cryptocurrency scams reported globally has been tripling yearly, with victims lured by the prospect of getting rich quickly.
At the Global Anti Scam Summit on Wednesday and Thursday, experts said they expect the trend to continue as the global economic outlook remains volatile.
The event is organised by the Global Anti Scam Alliance and is being held at The Hague Security Delta in the Netherlands, bringing together researchers, cyber-security experts and anti-scam agencies from around the world.
On Wednesday, Mr Camill Cebulla, the European sales director of Singapore-based cyber-security company Group-IB, said it found that crypto scams had increased by 335 per cent in the first half of the year from the same period in 2021.
In the first six months of 2022, the company had identified more than 2,000 domains registered just to promote crypto scams.
Such scams use videos containing deepfakes of popular personalities such as tech tycoon Elon Musk, luring victims into a purported crypto giveaway in exchange for their crypto wallet details and personal information.
Group-IB found that there were about 20,000 viewers for each such fake crypto giveaway stream.
In one instance, Mr Cebulla said the team had monitored several crypto wallets controlled by scammers.
They found that within just three days, from Feb 16 to 18, more than US$1.68 million (S$2.4 million) was being stolen by the scammers through 281 transactions.
In Singapore, the number of crypto scams reported to the police has jumped fivefold since 2019, with 631 reports made in 2021.
In a written reply to a parliamentary question by Mr Melvin Yong (Radin Mas) in October, Law and Home Affairs Minister K. Shanmugam revealed that there were 125 such reports in 2019, and 397 in 2020.
The minister said the majority of those behind such scams are outside of Singapore, limiting how much law enforcement here can do.
“Our ability to solve these cases will depend on the level of cooperation from overseas law enforcement agencies, as well as their ability to track down these scammers,” he said.
“Where the money has been transferred overseas, recovery is even more difficult.”
At the summit on Thursday, Mr Nick Smart, the director of blockchain intelligence company Crystal Blockchain, said the number of crypto scams have continued to increase year on year for the past six years.
He said such scams happen because victims are lured by the prospect of large profits, and scammers want to deal in crypto as it is easier to transfer the stolen funds in this way and harder for victims to recover them.
“Crypto is very alluring for people who are hard up and looking for a way out,” he said.
“It is very difficult to claw back (crypto lost to scammers) because of the nature of the blockchain. But that hasn’t stopped people trying to get their money back.”
Mr Smart warned that when told by law enforcement that the chances of recovery are close to none, some victims turn to private entities claiming to be able to get their money back.
He said many entities which claim to be able to do “crypto recovery” are often cheats themselves, telling potential clients that they can do in several hours what would take a supercomputer decades.
Mr Smart said victims who are already down and out and desperate would then hand over a fee before later being informed that they would not be getting their money back.
At the end of his presentation, Mr Jorij Abraham, the general manager of Global Anti Scam Alliance, stood up and called such entities “ruthless”.
He said: “They are ruthless... They know they cannot recover the money.”