Cryptocurrency scams have seen a staggering rise in recent years, leaving unsuspecting victims devastated and financially ruined. Naum Lantsman's story is one such example, highlighting the growing threat of crypto scams. This article explores Lantsman's experience, sheds light on the tactics employed by scammers, and discusses the alarming increase in cryptocurrency scams.

Promise of Wealth

Naum Lantsman, a 74-year-old business owner from Los Angeles, turned to cryptocurrency investments after his business suffered during the pandemic. Enticed by the promise of financial gain, he fell victim to a cryptocurrency scam orchestrated by a company called SpireBit, reports NPR.

Lantsman's loneliness played a significant role in his vulnerability, as scammers preyed on his trust and engaged him in conversation through messaging apps.

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Deceptive Platforms

Lantsman initially invested $500 with SpireBit, only to be lured into investing his entire life savings, totaling over $340,000. The scammers created a fake platform that simulated profits and growth, leading Lantsman to believe that his investments were thriving. However, when he attempted to withdraw his funds, he received forged documents demanding additional payments as a "security measure."

The Enigma of SpireBit

SpireBit, the fraudulent company involved in the scam, presented itself as a cryptocurrency investment trading platform. Investigations revealed that SpireBit had fabricated partnerships with reputable crypto companies, including Coinbase and Cash App. The founders' identities, as well as the true location of SpireBit, remain unknown. The Financial Conduct Authority (FCA) issued warnings, exposing SpireBit's fraudulent activities and disassociating it from a genuine FCA-regulated firm.

The Surge in Crypto Scams Post Covid

Cryptocurrency scams have become increasingly prevalent, particularly since the onset of the COVID-19 pandemic. According to the Federal Trade Commission (FTC), there has been a 900% surge in money lost to crypto scams since 2020, and these figures likely represent only a fraction of the actual incidents. The allure of massive profits and lack of understanding about the technology has made people susceptible to scams.

Vulnerability of Older Adults

Older adults, who often possess significant wealth, are particularly vulnerable to crypto scams. Scammers target this demographic due to their relative lack of familiarity with technology and potential isolation. The AARP advises its members to avoid investing in cryptocurrency based on online encounters and warns against responding to unsolicited messages or requests for money.

Dark Side of Cryptocurrency

Cryptocurrency's decentralized and pseudonymous nature provides scammers with an ideal playground. The absence of government regulation and insurance backing, coupled with the complexity of tracking crypto transactions, makes it difficult to recover funds once they have been transferred. These factors contribute to the ease with which scammers operate within the crypto industry. In some cases, there is no way to find out if the app selling or trading the cryptocurrencies or tokens is genuine. Some scammers use social media handles that give the impression they are into something legitimate. One can be easily fooled by a social media handle if it has a good number of followers and shows engagement with users.

Need for Consumer Protection

The rise in cryptocurrency scams calls for increased consumer protection measures and stricter regulations. Education about the risks associated with investing in crypto is crucial, particularly for those who may be more susceptible to scams. Governments and financial institutions must work together to safeguard individuals from falling prey to fraudulent schemes and provide avenues for reporting and recovering lost funds.