Liquidity mining scams accounts for a significant portion within the entire loss due to crypto scams.
On Thursday, the Federal Bureau of Investigation showed their concern and warned crypto owners. The law enforcement agency outlined the threat of liquidity mining scams on users of cryptocurrencies. FBI stated that they have issued warnings for US based crypto users. They mentioned a scam using a liquidity mining investment strategy to target and exploit cryptocurrency users, often Ethereum (ETH) or Tether (USDT) owners.
The FBI said that scammers approach crypto owners to make investments in their false liquidity mining applications. They use different social media platforms and reach crypto users through random direct messages (DMs). These imposters asked users to link their crypto wallets to their fake mining platforms.
Further the agency outlined that the scammers even display the crypto users’ fake returns on their investment. After getting influenced and trusting the liquidity mining scheme to be legit, inventors pour more crypto assets. Once gaining the trust of crypto investors, these fraudsters take control over the wallet and wipe it out completely.
As per the law enforcement agency, these liquidity mining scams account for about $75 million, since 2019.
In liquidity mining, crypto users get a chance to earn passive income. They put their crypto assets in a liquidity pool that provides the required liquidity to crypto traders. In return, liquidity providers receive their piece of profit from trading fees.
Crypto scams account for enough losses across all over the space. Many reports have shown their concerns while presenting the data of scams and losses because of them. Last month, the Federal Trade Commission reported that crypto scams since 2021, accounts for an overall loss of more than $1 billion.
The report outlined that there was a drastic increase in the number of crypto scams. It shows, in 2021, there were about 60 times more crypto scams losses reported in comparison to 2018. Further it added that people between 20 to 49 are more likely to fall in such scams. Such crypto users come in the contact of fraud crypto schemes or crypto scams through social media platforms like Facebook, Instagram, WhatsApp, Telegrams, etc. report added.
Source: https://www.thecoinrepublic.com/2022/07/26/fbi-alerts-crypto-users-beware-of-liquidity-mining-scams/