Be Crypto-Cautious: FBI Warns of Deceptive Token Scam

April 30, 2024

The Federal Bureau of Investigation (FBI) is raising red flags for cryptocurrency users, highlighting a new scam tactic involving impersonation tokens.

The FBI notes in a press release that criminals are resorting to creating counterfeit tokens that mimic well-known cryptocurrencies like Tether (USDT) and other stablecoins. These fraudulent tokens are then disseminated to unsuspecting victims via cryptocurrency addresses bearing a striking resemblance to legitimate ones previously used by the victims.

This nefarious scheme, known as an address-poisoning attack, capitalizes on the inherent truncation of cryptocurrency wallet software, where the first and last few alphanumeric characters of the addresses may appear identical to familiar ones. However, the middle characters are altered, effectively camouflaging the fraudulent nature of the tokens.

The modus operandi of the perpetrators involves sending these impersonation tokens to victims under the guise of trust-building or inducing a sense of indebtedness. Unfortunately, victims often realize the worthlessness of these tokens only upon attempting to redeem them at a cryptocurrency exchange.

In the press release, the FBI noted a recent incident in Colorado, underscoring the severity of the threat posed by such scams. An unsuspecting individual fell victim to a $2.1 million stablecoin investment scam, receiving a notification of an account lockout purportedly due to “malicious arbitrage,” accompanied by a staggering $1.5 million fine. Subsequent investigation revealed the involvement of impersonation tokens in the fraudulent transaction.

To protect oneself from falling prey to these scams, the FBI advises investors to meticulously scrutinize cryptocurrency addresses before initiating any transactions. It is crucial to verify the entire address, as scammers often manipulate the middle alphanumeric characters while retaining the first and last few characters to create the illusion of legitimacy.

Additionally, individuals are encouraged to utilize open-source blockchain explorers to verify the authenticity of both the token and the associated address. These tools can help identify suspicious addresses or token contracts, potentially preventing users from falling victim to fraudulent schemes.

As the prevalence of cryptocurrency-related scams continues to rise, the FBI emphasizes the importance of ongoing education and awareness. Should anyone become a victim of such scams, they are urged to report the incident promptly to the FBI’s Internet Crime Complaint Center at

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