FMA Flags YouTube-Based Crypto Scam as Digital Fraud Surges

  financemagnates.com 2 h

The Financial Markets Authority (FMA) has issued an alert about a rising cryptocurrency investment scam targeting social media users through YouTube channels and messaging platforms.

FMA Warns of YouTube Crypto Investment Scam

The fraudsters operate by creating YouTube channels offering cryptocurrency trading advice and luring viewers into private WhatsApp or Telegram groups with promises of investment tips and prizes. Once engaged, scammers pose as investment experts and direct victims to fraudulent trading platforms that mimic legitimate cryptocurrency exchanges.

The operation follows a calculated pattern where scammers first encourage small investments to build trust. Victims are then shown fabricated profits to entice larger investments. When users attempt to withdraw funds, they are met with demands for additional fees, though no money is ever released.

The FMA has identified over 40 suspicious trading platforms, including bi-investments.com, phoenix-trades.com, and bricsinvestlimited.com. These websites are designed to appear legitimate but are operated by scammers and their full list can be found here.

Protection Measures

The authority advises investors to:

• Verify trading platforms through the Financial Service Provider Register
• Avoid engaging with unsolicited investment advice on social media
• Report suspicious activities to relevant platforms
• Contact banks immediately if funds have been transferred.

The FMA advises anyone who suspects they’ve fallen victim to these scams to cease all contact with the scammers immediately, report the incidents to relevant platforms, and contact their bank to attempt transaction reversals.

WhatsApp: A Growing Risk for Financial Scams

Financial scammers are increasingly turning to WhatsApp and similar messaging platforms to target victims, as reported by Finance Magnates last month. These fraudsters often use these platforms to promote unauthorized investment schemes, luring retail investors with promises of high returns. The schemes typically rely on direct contact through mobile messaging, making them highly accessible to unsuspecting individuals.

A survey of 631 traders identified Telegram as the riskiest platform for trading scams, with 60% of respondents reporting financial losses. WhatsApp followed closely with a similar percentage of losses, while platforms like Facebook (56%), Instagram (51.8%), and SMS (50%) also showed significant risks. X (formerly Twitter) and LinkedIn were slightly safer but still concerning, with 43.7% and 45.4% of users reporting losses, respectively.

Fake Celebrity Endorsements Fuel Fraud

The FMA recently issued another warning about fraudulent investment schemes leveraging fake celebrity endorsements. Announced in May, the regulator highlighted the growing prevalence of social media ads promoting crypto and forex investments with fabricated celebrity endorsements. These scams often feature fake news articles that appear to originate from reputable New Zealand media outlets and use local celebrity images to gain credibility.

In March, the FMA also cautioned against a clone scam impersonating BTSWE, a legitimate cryptocurrency exchange in New Zealand. Fraudsters masquerading as BTSWE representatives contacted consumers, falsely promising to recover funds lost in unsuccessful investments. These impersonation schemes further underline the risks posed by scams exploiting the trust associated with recognized platforms and individuals.

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