Taiwanese police have arrested 14 suspects in connection with a cryptocurrency scam. Taipei Times reports that the crypto scam defrauded investors of around $5.41 million. The report cites information from Taiwan’s Bureau of Criminal Investigation. It refers to a scam that took place primarily on social media.
The bureau stated that the 14 suspects have been charged with fraud and money laundering.
Lured with photos of ugly women
According to CIB investigator Kuo Yu-Chih, a businessman known as “Chen” ran the crypto scam. In the process, investors were left millions out of pocket. The scheme encouraged investment in cryptocurrencies through social media platforms. The scammers used photos of pretty women to attract a large number of male investors.
Chen also allegedly operated a Taipei-based crypto transaction service Azure Crypto Co. Kuo explained:
Chen and his associates set up websites and allegedly used photos of pretty women to attract mainly male victims. Many of them were retired and had substantial savings.
On their websites and social media, Chen and his associates posed as financial advisors who specialize in mining cryptocurrencies. The scammers focused on obtaining investments in Ether, Tether, and Tronix. They promised victims high investment returns through blockchain technology.
According to the Taipei Times, more than 100 people fell for the scam. One of them had invested $1 million over two months.
DeFi network vulnerable to attacks
The news of this arrest comes at the times when crypto fraud is at an all-time high. According to analysts at Crypto Head, there have been 32 incidents of hacks and crypto fraud totaling $2.99 billion so far in 2021. This figure shows a 40.7% increase over 2019, with the number of crimes increasing by around 41% every year.
The most common type of crypto frauds are hacking attacks against wallets and exchanges. There have been at least 126 such incidents in the last decade. Frauds related to DeFi (decentralized finance) have occurred around 41 times in the last ten years.
The crypto technical editor at Crypto Head James Page wrote:
DeFi scams are on the rise as this new technology is more open to potential vulnerabilities.
Number of crypto scams on the rise
In the last decade, $19.2 billion has been stolen through hacker attacks and crypto scams. Bitcoin is the most commonly attacked currency. It accounts for 33.3% of all frauds. Bitcoin is the most traded coin in the world with a market value of nearly $1 trillion. The coin accounts for 43% of the crypto market and its capitalization is over $2 trillion.
The United States is the most frequent target of crypto attacks. But the use of cryptocurrencies is also increasing in developing countries. This could lead to more crypto crime in poorer parts of the world.
Even though most of the scams took place this year, the most money was stolen in 2017. At that time, scammers captured around $223.5 million. The biggest scam so far is Mt.Gox, where $615 million was stolen over the years. According to Crypto Head, it led to the platform’s bankruptcy in 2014.