Vermont’s Crypto Scam Warning

The Vermont Department of Financial Regulation (DFR), the financial regulatory agency for the state of Vermont in the United States, issued a warning about the rise of crypto investment scams perpetrated via popular social media sites.

On June 25, 74-year-old Naum Lantsman lost $340,000 through Instagram and Telegram-based cryptocurrency fraud. The DFR cited the incident to stress “the need for Vermonters to exercise extreme caution and vigilance when using or investing in cryptocurrency.”

A snippet of Vermont’s investor alert against crypto scams. Source: dfr.vermont.gov

The Federal Trade Commission (FTC) has ranked Instagram as the top platform related to crypto fraud, which is also true for Lantsman.

On Instagram, he came across a post from SpireBit professing to be an “international financial broker” dealing in cryptocurrencies.

This was his first contact with the crypto scammer. Lantsman created a SpireBit account without conducting any investigation or inquiry into the platform.

A Spirebit representative contacted Lantsman via Telegram and persuaded him to invest over several days. What began as a $500 investment resulted in a loss of more than $340,000.

Once a user invests on fraudulent platforms such as SpireBit, the dashboard displays profits on every transaction, encouraging investors to spend more money.

Lantsman had heard of crypto schemes in the past, but he never anticipated falling victim to one. The Vermont Department of Financial Regulation attributes the rise in crypto scams to con artists employing “more complex, personalized tactics” with multiple deceptions.

Background checks and vigilance can combat the ever-evolving methods of con artists, such as forging bank documents and statements and engaging in cordial conversation.

Vermonters have been asked to promptly report fraud to reduce financial losses and apprehend perpetrators.

Given the rise of North Korean “state-sponsored hackers,” Eun Young Choi, director of the U.S. Justice Department’s National Cryptocurrency Enforcement Team, described decentralized finance breaches as a “pretty significant issue.”

Choi also reaffirmed that the Justice Department is pursuing crypto firms that either engage in criminal activity or turn a blind eye to “obscuring the trail of transactions.”