The United Arab Emirates recognizes the tremendous potential of cryptocurrencies and blockchain technology, revealing that it will be a highly connected city and an ever-evolving business hub. .. One of the fruits of Dubai’s will to become a global center for crypto assets is the establishment of the largest crypto exchange platform.
For example, Binance, the world’s leading cryptocurrency trading platform, has been licensed to operate in Dubai, and in April 2022 Bybit and crypto.com announced their establishment here. In addition, Dubai has established a new law aimed at establishing the Emirate as an international center for related industries such as crypto assets and the Metaverse, and establishing a Dubai virtual asset regulator to oversee the regulation, governance and licensing of crypto assets. Enacted.
Unfortunately, the downside to the exponential growth of the crypto industry is the increase in crypto fraud in the UAE. In the first half of 2021, hundreds of cryptocurrencies occurred in Dubai, losing a total of 80 million Dh, according to the head of the Digital Asset Crime Section of the Dubai Police.
Cryptographic fraud occurs using a variety of means, as outlined below.
Transfer recall fraud: Fraudsters buy cryptocurrencies, send funds to sellers and receive tokens. However, he then filed a fraudulent complaint with the bank to cancel the remittance.
Peer-to-peer transactions using illegally earned money: People actually offer to buy tokens at a fair price from the criminal procedure. Victims indirectly become criminal partners.
Rubber Checks: Scammers suggest using rubber checks to buy cryptocurrencies at a reasonable price.
Third Party Scams: Scammers disguised as brokers find sellers and buyers, persuade them to meet in person for a transaction, and ask the buyers to bring cash. He then hands the buyer’s money to the seller and asks the seller to send the cryptocurrency to his account, the trading account, rather than the buyer’s account.
Copycat admin: Occurs in the Telegram group. It often happens after a member of the group requests advice. Fraudsters send messages to users disguised as administrators, requesting the target’s private key, or requesting them to log in to a fake platform to steal member account details and access the wallet. Provides help.
Pump and Dump Cryptocurrency Group: Scammers try to adjust price fixing on cryptocurrency exchanges. The tokens are then pumped up by a scammer (founder or insider) who sells the tokens with a short exponential price increase in crypto exchange and then crashes.
Gift Scams: Victims are fooled by being offered free cryptocurrencies or NFTs in exchange for their wallet’s public address and private key. Freebie ads may come from legitimate pages.
Counterfeit NFTs: Scammers hack NFTs, recreate them, and sell them on legitimate platforms.
In most of these scams, the scammer contracts with the victim without formalizing the victim. Therefore, it is difficult for the victim to file a proceeding against the fraudster.
How to avoid such scams
First and foremost, we do not share personal information and ignore anonymous calls, messages and advertisements.
The Dubai Police Digital Asset Crime section was created last year as a proactive approach to addressing the rise in cybercrime that occurs around cryptocurrency issues. The section head said: “Ask companies and people to provide a copy of their trade license is harmless as it is public information and not confidential. Also, make sure the license is not Photoshop.”
Second, it is imperative to make all transactions using the exchange platform regulated by the UAE’s financial regulators. For example, check with the Dubai Financial Services Regulatory Authority (DFSA) or Abu Dhabi Global Markets (ADGM) for licenses and regulatory permits.
The UAE Security and Commodities Authority (SCA) has a list of alerts if you falsely claim to be regulated by the UAE. Regarding DIFC, DFSA has sent an alert about fraudulent crypto assets.