The Federal Bureau of Investigation (FBI) has issued an investor alert on Thursday warning crypto owners of a scam. The law enforcement agency said as follows:

“The FBI is issuing this public service announcement to warn American citizens about a cryptocurrency scam using an investment strategy called Liquidity Mining in which scammers exploit owners of cryptocurrency, typically tether (USDT) and/or ethereum (ETH).”

“Liquidity mining is an investment strategy used to earn passive income with cryptocurrency,” the FBI explained. “In legitimate liquidity mining operations, investors stake their cryptocurrency in a liquidity pool to provide traders with the liquidity necessary to conduct transactions. In return, the investor receives a portion of the trading fees.”

Claiming to use this investment strategy, “Scammers convince victims to link their cryptocurrency wallets to fraudulent liquidity mining applications. Scammers then wipe out the victims’ funds without notification or permission from the victim,” the FBI cautioned.

“Scammers approach potential victims through an unsolicited direct message (DM) on social media, dating applications, or messaging services such as Facebook, Instagram, Twitter, Linkedin, Whatsapp, etc.,” the announcement adds.

Victims of a liquidity mining scam would move cryptocurrency from their wallets to the liquidity mining platform, the FBI explained. After investing, they often see the alleged returns on a falsified dashboard. they purchase additional cryptocurrency, seeing their investments to be a success. The scammers then ultimately move all stored cryptocurrency and investments made to a wallet they control.

The FBI noted:

“Since January 2019, according to the FBI’s Internet Crime Complaint Center (IC3) and open source, this scam has been responsible for over $70 million in combined victim losses.”


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