Crypto Fraud on LinkedIn

Cryptocurrency scam artists have a new vehicle for stealing the savings of unsuspecting investors—they’re posing as financial advisors on the professional networking platform LinkedIn.

“It’s a significant threat,” FBI special agent Sean Ragan told CNBC. “This type of fraudulent activity is significant, and there are many potential victims, and there are many past and current victims,” said Ragan who runs the FBI’s San Francisco and Sacramento offices.

The fraudsters first connect with professionals on LinkedIn. Then, they advise them to make cryptocurrency investments on popular investment platforms. Finally, they urge the victim to transfer their crypto investments to a site that the fraud artist controls. Once that happens, the money is gone.

“We just never thought there could be such malicious intent behind a LinkedIn profile,” a victim who lost $350,000 told CNBC. 

“It’s life destroying and soul crushing,” another victim who lost $700,000 told CNBC. “People have lost their houses and their car loans.”

LinkedIn concedes there has been an increase in fraudulent use of its networking platform. “Trying to identify what is fake and what is not fake is incredibly difficult,” admitted Oscar Rodriguez, LinkedIn’s Senior Director of Trust, Privacy, and Equity. LinkedIn says it closed more than 32 million fake accounts from its platform in 2021, most through automated defenses. It also closed 127,000 false profiles that were reported by LinkedIn users.

Cryptocurrency investors seem particularly susceptible to scams because the once high-flying digital currencies attracted many people who dreamt of get-rich-quick investments.  Now that prices have crashed, investors may be more vigilant, not only about the risks they’ve assumed by purchasing digital currencies, but also the danger posed by scam artists who seek to fleece cryptocurrency investors.