The Cybersecurity and Infrastructure Security Agency (CISA) has issued a stark warning about an alarming increase in scams involving individuals impersonating federal employees to target cryptocurrency investors. According to the alert released on June 12, these fraudsters often use the names and titles of government employees to deceive victims.

CISA made it clear that its staff will never ask for money transfers, whether it be cash, cryptocurrency, or gift cards. The agency advised those suspecting a scam to avoid making payments, note the caller’s phone number, hang up immediately, and validate the contact by calling CISA directly.

Phil Larratt, the director of investigations at Chainalysis, shared insights on the growing threat to the cryptocurrency ecosystem, stating that scams continue to be a significant problem. He revealed that scams generated at least $4.6 billion in revenue in 2023 alone.

Impersonation scams, according to the Chainalysis 2024 Crypto Crime Report, ranked fourth in impact based on average payment size, with victims losing an average of $948 per scam.

Larratt emphasized the importance of public education as the first line of defense against large-scale scamming. He noted that once crypto assets are transferred to a third party, the original owner loses control without the third party’s private keys.

Among the most prevalent tactics are approval phishing and crypto drainers. Scammers use fake crypto apps and promote fraudulent Web3 sites on platforms like Discord and compromised social media accounts. Victims are tricked into connecting their crypto wallets and approving transaction proposals that give scammers control over their funds.

Larratt concluded by stressing the need for Web3 projects and users to adopt protective security measures, such as Web3 security extensions, to combat these sophisticated scam tactics.

As crypto scams continue to rise, it is crucial for investors to stay informed and vigilant. Following CISA’s guidelines and understanding common scam tactics can help protect against financial losses in the ever-evolving world of cryptocurrency.