A Brooklyn-based crypto police unit has seized a scam network’s email list and used it to warn more than 1,200 potential victims.

The Virtual Currency Unit used the new technique to bring down the network whose members posed as financial advisers from “stocks-finance.com” to target the borough’s Russian community.

The scheme is estimated to have netted $1 million from victims in Brooklyn and $5 million throughout the US.

Brooklyn District Attorney Eric Gonzalez announced the conclusion of the investigation yesterday which resulted in the shutdown of 70 fraudulent domains. 

“For the first time anywhere in this type of probe, Brooklyn prosecutors were able to execute warrants to seize and take control of the server, cutting off the scammers from the victims, their contact lists, and address books,” the press release claimed.

Read more: Austrian crypto scammers blew thousands on clubbing, hookers, shark tank

Gonzalez said, “Since recovering lost funds is often impossible because they’re typically quickly cashed overseas, we focus on disruption and education.” 

Two weeks ago, the same police crypto unit announced that it had shut down 40 phony NFT marketplaces after it was tipped off by an 85-year-old painter who had lost their life savings. 

The painter was scammed out of $135,000 by somebody pretending to be an art dealer who wanted to convert his art into NFTs. The scammer claimed that the victim’s NFTs had made $300,000 and that the exorbitant sum was needed to access these profits.

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Around 100 investors in a Mexican crypto trading bot scheme that promised “daily payouts” and claimed to operate its own “crypto credit card” have filed an official complaint with public prosecutors after the firm disappeared, shuttering its physical offices, and blocking withdrawals.

As reported by Milenio, Tehuacán and Puebla-based AMG GPT allegedly lured more than 3,000 people into buying trading bots — with prices starting at 400 pesos — “for a set time period” in return for seemingly guaranteed returns.

However, while some users initially reported making money from their investments, the regular payouts didn’t last and many started to report “constant delays” when trying to access their funds.

They were apparently told by AMG staff that they would need to “pay verification fees” if they wanted to access their money and when users attempted to visit the company in person, they found all four of its offices shuttered.

According to Mexican journalist, Carolina Espinosa River, “The offices in Tehuacán have completely disappeared, leaving the premises empty.

“Although some supposed ‘leaders’ have been identified, they have also claimed to be victims of fraud. They state that they do not know who is responsible for the scheme.”

AMG also ran numerous promotional events and giveaways, including raffles that were supposedly giving away iPhones and Teslas. However, much like users’ funds, these prizes weren’t forthcoming.

Read more: Austrian crypto scammers blew thousands on clubbing, hookers, shark tank

Before disappearing, the company issued a statement that claimed the delays were caused by a “shopping festival” event that would provide investors with “generous rewards,” however, users simply claimed that this muddied the waters further.

It also said that worried users were required to apply for a special credit card called “Crypto-VISA.”

However, people who purchased these cards have since reported that they were asked for codes that drained their accounts.

It’s thought that AMG collapsed when it was unable to sustain the influx of new investors drawn in by recommendations from existing users who had benefitted — or thought they had benefitted — from the scheme.

One unfortunate victim told River, “It is urgent that this information be known, that the authorities take action on the matter, because they scammed a lot of people. They got a lot of people into a lot of trouble, including me and my family.

“Right now we are in debt, we don’t have money to pay, we owe a lot of money to people, friends, family, we are all very upset.

“We don’t know what to do, they are not giving us our money back, they are turning a blind eye and are running away with all the money.”

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In just over 15 hours, three unlucky crypto users lost a total of $876,000 worth of assets to common on-chain scams.

A combination of techniques, specifically ‘approval phishing’ and ‘address poisoning,’ were used in the scams, which were spotted by X (formerly Twitter) account Scam Sniffer.

The first, and largest, of the thefts was caused by a user signing a malicious ‘permit’ transaction, allowing the scammer to steal 211 Lido-staked ether (stETH) worth $654,000.

Read more: Compound Finance and Celer Network websites compromised in ‘front-end’ attacks

Phishing with drainers

According to Scam Sniffer, the address to which the victim had inadvertently granted approval to move their stETH was “a malicious contract disguised as a Token.” These dangerous permit or approval transactions are often presented to users by scam-as-as-service malware packages called wallet ‘drainers.’

The drainers are often disseminated via hacked X (formerly Twitter) accounts, which can be used to post FOMO-stoking airdrop or token launch announcements, before linking the victim to a wallet drainer script.

Prolific blockchain detective ZachXBT described the typical workings of such groups, who take control of accounts via SIM-swapping, in a post on X last year.

Another method is via so-called ‘front-end’ attacks, in which the genuine domains of crypto platforms are hijacked to craft malicious transactions and serve drainers to potential victims’ wallets. 

Drainer packages themselves are developed as a product or service to be used by the phishing scammers. A cut of each theft is automatically split between the drainer developers and the scammers that use them.

This model has proven to be extremely profitable. In May, when a prolific drainer service known as Pink Drainer announced its retirement after facilitating $75 million worth of thefts, crypto security firm SlowMist identified over $20 million held in related addresses.

Inferno Drainer, which shut down a year ago, has been cashing out its ill-gotten gains recently, sending a total of 4,010 ETH (currently worth $12.4 million) to sanctioned crypto mixer Tornado Cash. Previous attempts to use alternative privacy tool Railgun were blocked by the team.

Read more: Pink Drainer ‘steps back from the grind’ after stealing $75M from victims

Address poisoning scam

The other two victims lost similar amounts (111,500 and 111,726) of the USDT stablecoin to ‘address poisoning,’ a type of scam which, while much simpler, proves equally dangerous.

Address poisoning relies on victims accidentally copy/pasting a scammer’s address from a ‘contaminated’ transaction history on a blockchain explorer such as Etherscan.

Read more: Refund of $70M ‘address poisoning’ scam ongoing, over 50% returned

Often, following sizable transfers, fake versions of common tokens will suddenly appear in a potential victim’s address, or appear as ‘spoofed’ transfers to accounts with similar leading and trailing characters to the genuine address (as can be seen in Scam Sniffer’s screenshot above).

Despite efforts to hide these misleading transactions by the explorer’s developers, losses are still common. For higher-value victims, scammers even opt to send genuine tokens as a workaround, putting real money on the line whilst hoping to hook a big win.

Staying off the hook

As always, double-check the URL or X account handles before clicking any links or connecting a crypto wallet. However, this may not be enough in the case that the genuine website or account has been compromised.

Learn how approvals and permits work. It is important to maintain strict ‘approval hygiene,’ revoking any active approvals and avoiding setting or accepting ‘infinite’ approvals when prompted.

Additionally, the use of built-in wallet address books can flag any unexpected addresses involved in a transaction which may be harder to spot by eye. These addresses can then be re-used instead of copying from a (potentially contaminated) transfer history.

Don’t rush, and don’t sign anything you don’t understand

Despite these well-known security measures, plenty of accidents still occur. Be it down to distraction, FOMO, rushing, or tiredness, it’s not difficult to imagine how even experienced crypto users fall for these scams on a regular basis.

Scam Sniffer’s most recent monthly round-up identified “approximately 12K victims [who] lost $20.2 million to crypto phishing scams” in October, with four cases of over $1 million. Despite an overall total 56% lower than the previous month, the number of victims grew by 20%.

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Researchers in the US have reportedly used OpenAI’s voice API to create AI-powered phone scam agents that could be used to drain victims’ crypto wallets and bank accounts.

As reported by The Register, computer scientists at the University of Illinois Urbana-Champaign (UIUC) used OpenAI’s GPT-4o model, in tandem with a number of other freely available tools, to build the agent they say “can indeed autonomously execute the actions necessary for various phone-based scams.”

According to UIUC assistant professor Daniel Kang, phone scams that involve perpetrators pretending to be from a business or government organization target around 18 million Americans every year and cost somewhere in the region of $40 billion.

GPT-4o allows users to send it text or audio and have it respond in kind. What’s more, according to Kang, it’s not costly to do, which breaks down a major a barrier to entry for scammers looking to steal personal information such as bank details or social security numbers.

Indeed, according to the paper co-authored by Kang, the average cost of a successful scam is just $0.75.

Read more: Hong Kong busts crypto scam that used AI deepfakes to create ‘superior women’

During the course of their research, the team carried out a number of different experiments, including crypto transfers, gift card scams, and the theft of user credentials. The average overall success rate of the different scams was 36% with most failures due to AI transcription errors.

“Our agent design is not complicated,” said Kang. “We implemented it in just 1,051 lines of code, with most of the code dedicated to handling real-time voice API.

“This simplicity aligns with prior work showing the ease of creating dual-use AI agents for tasks like cybersecurity attacks.”

He added, “Voice scams already cause billions in damage and we need comprehensive solutions to reduce the impact of such scams. This includes at the phone provider level (e.g., authenticated phone calls), the AI provider level (e.g., OpenAI), and at the policy/regulatory level.”

The Register reports that OpenAI’s detection systems did indeed alert it to UICU’s experiments and moved to reassure users that it “uses multiple layers of safety protections to mitigate the risk of API abuse.”

It also warned, “It is against our usage policies⁠ to repurpose or distribute output from our services to spam, mislead, or otherwise harm others — and we actively monitor for potential abuse.”

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Five people have been jailed in Austria for their part in a $16 million pyramid scheme that duped 40,000 victims into investing in real estate and cryptocurrency and allowed the perpetrators to spend tens of thousands of euros on luxury cars, private jets, prostitutes, and a shark tank.

As reported by the Daily Mail, 11 suspects from Austria, Croatia, and Italy went on trial over the course of 60 days at the Klagenfurt Regional Court in what has been called Austria’s biggest-ever fraud trial.

The defendants, who included the 24-year-old stepson of an unnamed celebrity, were accused of guaranteeing investors massive profits if they pumped their money into property and traded in various cryptocurrencies, including the EXW token.

However, they pocketed the funds instead, allegedly spending vast amounts on high-end vehicles, club nights in Dubai, property, and a shark tank.

The celebrity’s stepson also reportedly spent €100,000 ($108,000) on prostitutes.

Read more: Football legends Ronaldinho, Luis Figo sued for Omegapro crypto scam promo

Five of the accused were jailed for between five years and 18 months while another five were acquitted. The eleventh defendant was absent from court.

Police said tackling the gang was made particularly difficult by the tactics it employed, which included transporting money in plastic bags, storing cash in shoe boxes, and exchanging funds via crypto platforms until the trail was all but invisible.

Prosecutor Caroline Czedik-Eysenberg said, “There were never any profitable projects” and that the schemes were “only there to attract customers.”

One of the gang’s defense lawyers claimed that their client had not intended to commit fraud but had “invested a lot of work and planned to make profits with various assets,” before becoming overwhelmed by the project.

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A quick search on Google for Sony’s blockchain ecosystem Soneium reveals a deceptive top result that, if engaged with, will instantly drain your wallet.

This phishing scam abuses Google’s ad service in order to reach the very top of its search results. On the outset, everything looks kosher — the link appears to be legit (soneium.org) and the description, though a little buzzword-y, rings true.

“Soneium Minato Testnet — Soneium enables developers and users to bridge creative ideas with cutting-edge technology,” the top result for ‘Soneium’ on Google reads. “Soneium offers a user-friendly environment that connects innovative minds worldwide.”

Unfortunately, that’s not the only thing this deceptive site is connecting. After several redirects, the ad will take you to ‘someium.org.’ A carbon copy of soneium.org, users could easily mistake it for the real thing. If they were to connect their wallet, the phishing scam will immediately drain their funds.

Read more: New bitcoin sextortion scams in Canada use photos of victims’ homes

This concerning mirror site was initially flagged by Scam Sniffer on X (formerly Twitter). The sleuths warned followers that, even if soneium is misspelled as someium, the top result will likely be the same phishing scam.

To avoid this Soneium phishing scam, make sure to always check the final URL. Phishing ads disguise as official domains through multiple redirects, as is the case here — meaning that even if the link you click on appears legit, the site you end up on may have an entirely different URL.

Protos has reported the ad to Google.

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Police in Hong Kong have reportedly broken up a crypto scam that used face-swapping technology to persuade lonely men to part with HK$360 million (US$46 million) via a fake investment platform.

According to a statement issued on Monday, police arrested 21 men and six women for their part in the plot that saw them swap their faces with those of beautiful women during video calls to persuade victims to hand over money.

Victims included men from Taiwan, China, Singapore, and India.

“The syndicate’s operation began with online romance,” said Senior Superintendent Fang Chi-kin, head of the New Territories South regional crime unit.

“Following initial contact with victims on social media platforms, they first sent artificially generated photos using AI technology to create attractive individuals in terms of appearance, personality, occupation, education, and other aspects,” he added.

“Despite engaging in video calls, the victims continued to believe they were building a romantic relationship with supposedly superior women.”

Fraudsters sent victims fabricated proof of profits but it became clear that they had been conned when they were unable to withdraw any funds.

Read more: Hundreds freed from ‘pig-butchering’ compound after victim escapes

According to police, recruits to the Hong Kong crypto scam were fully trained and even received a manual detailing how to approach victims and create personas.

“These criminals view innocent citizens as exploitable targets, using every word to gain their trust, ultimately aiming to take their money,” said Superintendent Iu Wing-kan.

Authorities said the operation represented the first time they had cracked down on a Hong Kong-based fraud syndicate that employed deepfake tech to cheat people.

As a result of the raids on the gang’s 4,000 sq ft warehouse base, police also seized computers, more than 100 mobile phones, HK$200,000 ($26,000) in suspected proceeds, and a number of luxury watches.

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The face behind an alleged $650,000 UK crypto scam that was documented in detail by ZachXBT today has been revealed by a user on X (formerly Twitter).

X user Padrino revealed a photo of the alleged scammer while asking if they’re “Ready to go to prison?” They posted screenshots of the individual while they appeared on a webcam.

ZachXBT has confirmed that the individual is indeed the alleged scammer, telling Protos that footage of the individual was recorded during a video call and that a photo of his face was shared with Padrino.

Audio from the call was shared here in ZachXBT’s thread. The crypto sleuth claimed the man stole crypto from over 250 individuals by promising a paid trading service that was promoted with screenshots of fake, lucrative trades.

Victims were coaxed into sending $250-$500 first, then, after being told their profits had skyrocketed, the victims were pressured into sending another $20,000 to claim their supposedly locked funds.

It is suspected that the figure for victim losses is larger than $650,000 and that the alleged scammer is in the UK and not in Singapore as they claim.

ZachXBT said, “It is sad to watch this scammer take advantage of so many desperate people and newbies looking for a win. Hopefully this info will assist law enforcement in further identifying the scammer.” 

Another crypto scam group was infiltrated by ZachXBT this month, where the scammers were filmed celebrating the theft of over $238 million.

Got a tip? Send us an email or ProtonMail. For more informed news, follow us on X, Instagram, Bluesky, and Google News, or subscribe to our YouTube channel. Quotes in bold are our emphasis.

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With Donald Trump busy fumbling the launch of his newest crypto offering, World Liberty Financial, phony projects have been cashing in on the frenzy.

From August 29 through late Monday evening, the only thing Trump had said about his project was its name. This left the rest to the world’s imagination and opened the door to fakes and lookalikes who duly lured in suckers and their money.

From September 3 through at least noon on September 17 — the day after Trump’s launch — a fake website ranked ninth among Google’s search engine results for the query ‘World Liberty Financial.’ The website promoted a fake governance token, WL, which has sadly traded over $3 million since inception.

A dizzying assortment of fake governance tokens exists for World Liberty Financial, which has not yet launched an official version. A brand new — and very fake — WLFI on Binance Smart Chain traded over $50 million in the 24 hours after Trump said he would issue the real WLFI sometime in the future.

A fake WLFI on Ethereum has traded over $7 million over the past three days while another fake on Solana traded almost $1 million. On Coinbase’s Base, another traded over $60,000.

Read more: Who is behind World Liberty Financial, Trump’s new crypto?

Of course, transaction volumes do not necessarily equate to money lost. Wash trading and self-dealing is rampant across crypto exchanges and so many of these figures could include insiders washing money in a merry-go-round to create the fake impression of trading activity or credibility.

It is virtually impossible to know how much money the founders of these fake projects have stolen.

Even more fake World Liberty Financial scams

World Liberty Financial does have a Telegram channel, but many fake channels drew in thousands of suckers. One imposter attracted more than 70,000 by promising giveaways worth up to $15,000. Once inside the fake channel, administrators encouraged users to connect their Metamask wallet and grant permissions that permitted the draining of funds.

Hackers also overtook the X (formerly Twitter) social media accounts of Trump family members to promote fake crypto giveaways during the two weeks leading up to the launch of World Liberty Financial.

Read more: The entire DJT token drama in one article

Even before Trump named his project, professional grifters were busy co-opting his surname for their own purposes. Formerly imprisoned felon Martin Shkreli claimed that he had earned the endorsement of Trump’s son Barron for a meme coin, DJT.

Sadly, the fake coin traded hundreds of millions of dollars while declining 97% from its high to date.

In short, Trump’s latest crypto project has not even launched, yet in the confusion, thousands of people have already lost money. Even staunchly pro-Trump news station Fox News was disappointed in Trump’s launch of World Liberty Financial. On Monday, it lamented its “thin” and “uneven rollout.” Wired called the event “meandering” and “short on details.”

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A phishing website posing as the Ethereum search tool Etherscan has been spotted on search engines DuckDuckGo and Bing as one of the first Etherscan search results.

Scam Sniffer flagged the Etherscan phishing site today and warned users on X (formerly Twitter) that, “Your assets could be at risk from a simple mistake. Stay safe and alert!” 

The phishing site utilizes the same logo as Etherscan and describes the basics of the tool. DuckDuckGo and Bing also list the phishing site as the second search result just below the legitimate Etherscan site.

The fake site can be spotted by the extra dash in its web address which rewrites “etherscan” as “et-herscan.”

Scam Sniffer told Protos that the site uses a crypto phishing kit called “Angel Drainer” which was previously deployed in a “supply chain attack on Ledger’s frontend components.”

Read more: Ethervista ‘unconsciously hacked’ hundreds of times by bot

The security firm also highlighted the problem of phishing websites and noted that someone lost almost $521,000 to a fake permit signature crypto scam. On the other end of the scale, the FBI reported this week that crypto scams and fraud made over $5.6 billion in 2023, a 45% increase from the year before.

Crypto exchange OKX and AI blockchain security firm Veritas Protocol also warned users to make sure they identify websites properly. Veritas Protocol said, “Phishing sites can look very convincing, and it’s easy to make a mistake” 

“Always double-check URLs before clicking, especially when handling crypto assets. Stay safe out there and always verify that you’re using the official site!”

Update September 11, 14:39 UTC: Included details about the type of crypto drainer Scam Sniffer found in the fake Etherscan site.

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