Scams are an unfortunate reality in the cryptocurrency community. Every few months, there’s a new way to scam someone into giving up their valuable funds or act as a third party to scam exchanges out of their funds when they aren’t careful.
While the first cryptocurrency mining scams used fake or contaminated links on popular video sites to download rogue cryptocurrency mining software, scammers are becoming creative and capable of creating fake versions of popular apps in the App Store and Google Play Store.
But one of the hardest scams to identify is the liquidity mining scam.
Liquidity is essential for traders, as trading with insufficient liquidity can incur significant slippage. Liquidity mining is a process that allows users to contribute to new block production in exchange for rewards. Through this process, liquidity mining allows those with excess cryptocurrencies to provide that liquid currency to those who need or want it at better rates than would usually be available on centralized exchanges.
According to Sean Gallagher, a senior threat researcher at Sophos, liquidity mining scammers use constructed profiles and give unsolicited offers via direct messaging.
In Sean’s experience, a Twitter account claiming to be a young woman in America invited him to study liquidity mining and asked him to continue the conversation on WhatsApp or Telegram. The fraudster tried to guide him to set up a Coinbase wallet and deposit Tether (USDT), an altcoin that’s…
