Cryptocurrency investors have been warned of a scam involving the liquidity mining investing technique by the Federal Bureau of Investigation (FBI). According to the law enforcement agency, the total losses to victims from this scam have exceeded $70 million.
The Federal Bureau of Investigation (FBI) issued an advisory on Thursday which conveyed the same.
“The FBI is issuing this public service announcement to warn American citizens about a cryptocurrency scam using an investment strategy called Liquidity Mining in which scammers exploit owners of cryptocurrency, typically tether (USDT) and/or Ethereum (ETH).”
The FBI described liquidity mining as an investment approach for generating passive revenue with cryptocurrencies. To give traders the liquidity they need to complete deals, investors stake their bitcoin in genuine liquidity mining activities. A portion of the trading commissions is given to the investor in exchange.
Scammers urge their victims to connect their bitcoin wallets to a phony liquidity mining software by making the claim that they utilize this investment approach. The victims’ funds are subsequently stolen by scammers without their knowledge or consent, the FBI warned.
“Scammers approach potential victims through an unsolicited direct message (DM) on social media, dating applications, or messaging services such as Facebook, Instagram, Twitter, Linkedin, Whatsapp, etc.”
As per the FBI, victims of a liquidity mining fraud transfer cryptocurrency from their wallets to the liquidity mining network. They frequently witness the alleged results on a fabricated dashboard after investing. They invest in more cryptocurrencies because they think their initial investments were successful. Scammers eventually transfer all cryptocurrencies held in storage and investments made to a wallet under their control.
The FBI’s Internet Crime Complaint Center (IC3) and open source indicate that since January 2019, this scam has cost its victims a total of more than $70 million in losses.