Firm warns be aware of Black Friday, Cyber Monday crypto scammers

Complex transaction dispute resolution provider MyChargeBack is warning cryptocurrency users to be aware of crypto scammers this Black Friday and Cyber Monday, who will prey on individuals who have been affected by the year-long crypto winter and the recent collapse of cryptocurrency exchange FTX.

MyChargeBack said in a statement that with crypto values plunging, there will be fake cryptocurrency recovery firms taking advantage of the weakened cryptocurrency environment. 

“Since the so-called ‘crypto winter’ began in November 2021, bitcoin and ether have dropped close to 75 percent from their peak, and they were the lucky ones,” the statement said.

“All told, the cryptocurrency industry lost over $2 trillion in value over the past year. But then it got even worse. In June, Celsius, a pioneering cryptocurrency lender, filed for bankruptcy, revealing that its balance sheet was $1.2 billion in the red.

“And then, this month, came the collapse of FTX, which is estimated to have wiped out as much as $32 billion off the ledgers.”

Vice President of Global Operations at MyChargeBack Michael B. Cohen said cryptocurrency investors have been left “holding the bag” in the wake of FTX and other crypto firm and coin collapses.

“And regrettably, we now see a dramatic surge in scams posing as ‘crypto recovery firms’ that seek to capitalize on that, especially in connection with Black Friday and Crypto Monday, which have come to mark the start of the holiday season,” said Cohen.

He added: “With few exceptions, no one can recover crypto alone, because recovery almost always requires the involvement of the police and often the courts as well.

“A claim of 100 percent success is a red flag for a fund recovery scam.”

Even more of a red flag should be anyone suggesting recovering FTX assets, given that the company is under Chapter 11 bankruptcy protection and the Securities Commission of The Bahamas has frozen its assets and has them under protection.

Cohen suggests verifying a company’s provenance before contacting it for help with crypto recovery.

“Obviously, a firm whose website URL was registered only a week ago cannot seriously claim to have recovered millions of dollars for thousands of clients over the past year,” said Cohen.

“But that’s exactly what these scam websites that pop up overnight say.”

He added: “Without knowing who the beneficiary is, there is no way crypto can be recovered. Open-source software that anyone can use can trace the linear path cryptocurrency takes between a sender and a receiver, but the maximum it can provide is the address of the last wallet the crypto landed in, not the exchange that hosts it, which is the vital information that has to be provided to the police to assist them in opening a criminal investigation.”

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Chester Robards

Chester Robards rejoined The Nassau Guardian in November 2017 as a senior business reporter. He has covered myriad topics and events for The Nassau Guardian. Education: Florida International University, BS in Journalism

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