Security

Researchers find $500M scam targeting French speakers via fake crypto websites

Refer Friends. Earn Crypto Together.

A crypto scam network stole as much as $500 million through impersonating mainstream banks and crypto companies in order to convince their victims to purchase fake stocks, NFTs and crypto.

The scam ring, named CryptoLabs, has been targeting French speakers through a network of over 300 fake domains, ranging from crypto and fintech organisations to banking and asset management industries. One victim alone lost over $1.6 million to the scam.

A report published by security analysts Group-IB says: “CryptosLabs is a well-organized illicit business that has a hierarchy of kingpins, sales agents, developers, and call-center operators that collectively could have earned as much as €480 million since its launch.”

In order to steal from their victims, CryptoLabs created a sense of legitimacy with their well developed software interfaces, genuine looking advertisements, and dedicated “investment managers” offering tailored customer service.

According to Groub-IB analysts, at least 20 French victims signed up to a fake trading site, like the one pictured, and collectively lost $295,000.

It’s estimated that the gang has been operating since 2018, being “one of the few scam-as-a-service operations” with a geographical focus on France, Belgium, and Luxembourg, according to Anton Ushakov, head of Group-IB’s Europe cyber investigations.

Read more: Bankman-Fried deepfake lures FTX customers into giveaway scam

The CryptoLabs scam

CryptoLabs relies on a scam tool kit created by themselves to provide new recruits with the software to set up fake, recognisable websites in minutes. “From an operational perspective, CryptosLabs is a well-organized and fully automated profitable IT business,” the report says.

But how does it work?

  • First the fake site is created with the tool kit. Social media ads and search engine results then lure users into clicking what they believe to be a legitimate company.
  • The site offers promising return on investments, but visitors must first enter their details to gain access. After this, the scammer’s call center is notified and later contacts the victim.
  • Fake salesmen, managers or investors then walk users through a verification process with a $300 entry fee and multiple documents to sign.
  • Once approved, users will be presented with a lucrative looking trading platform. If users wish to withdraw, there’s another fee to pay.

However, the withdrawal fees are never an issue, as all money deposited is sent straight to the scammers, and users are left with the equivalent of monopoly money to trade on a worthless site.

   
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