Toronto police are warning cryptocurrency investors of an ongoing phishing scam that has defrauded victims out of several thousands.
Police explain that the fraudsters are using fake sites to carry out the scam when people who have their cryptocurrency stored on an online platform use a search engine to find the site and log in.
The search results usually show multiple sites and the top hit may be a sponsored advertisement for a site that looks legitimate, but in reality mirrors the actual cryptocurrency exchange page.
The mirrored page is designed to capture the user’s login details and once the account details are entered, they cannot actually log in.
While trying to recover the account, the user may enter the answers to their private account recovery questions. All this information is then used to transfer the user’s cryptocurrency to the scammer’s accounts.
One of the victims of such a scam tells CityNews he is well versed in cryptocurrency and has been investing in it for over five years, believing that he knew the risks and how information could be compromised well enough not to fall for a scam.
Rick (name changed for privacy) says he lost over $300,000 in Ethereum on July 13, when he accidentally logged in to a mirror site, instead of the real one.
When he logged into his “wallet,” he received a notification for a normal firmware update which asked him for his password to proceed.
He says the currency was gone in an instant and the scammers sent the currency from his account to another one and eventually moved it to 12 other accounts, making it extremely difficult to track down.
According to Rick, the only trail left that may help in finding the funds are what’s known as “address codes” and upon following them, he discovered they’re linked to accounts in Eastern Europe.
While he did report the incident to police, he believe the search engines should be liable as it is possible to pay to have certain sites show up as top searches on them.
Police is warning people to be extra cautious when it comes to protecting their investments in cryptocurrency.
“As cryptocurrency is decentralized and not regulated, it can be extremely challenging to recover these assets,” they said in a release.