Crypto scams are booming. A recent fraud victim shares the top tips to protect yourself.

• With the crypto asset boom has come a rise in crypto-related crime.

• One victim Business Insider spoke with lost $280,000 as a result of a pig butchering scam.

• He shared his insights on how to avoid falling victim to crypto fraud.

Joe Novak vividly remembers the day he first made contact with a stranger on Facebook—October 8, 2024.

When he accepted a friend request from a woman he did not know, Novak never suspected that just a few months later, he would be out roughly $280,000. He also didn’t realize that the scam perpetrated against him was a type of fraud that had rapidly risen alongside the boom in cryptocurrencies over the last decade.

Recently divorced at the time and grappling with unemployment, Novak connected with a woman who went by the name Ailis Danner. She found him after he posted to a digital petition on Facebook.

Bezalel Eithan Raviv, founder and CEO of forensic blockchain firm Lionsgate Network, told Business Insider that most crypto scams are being carried out on Facebook, with WhatsApp a close second.

Novak and Danner grew close in the months after connecting online, communicating primarily over WhatsApp. They got so close that Novak became willing to follow the investing advice she began doling out.

“She told me how she makes passive income from, you know, this investment site that her sister vetted out,” Novak told Business Insider. “You can sign up for a free account, and then you have $100,000 of play money. So you can see how this whole system works and then decide.”

Danner presented it to Novak as a kind of decentralized banking. The app she instructed him to use was called defiai.top, and it featured various tiers of investing.

“My first investment was like $50,000 and that got me a few hundred bucks at the end of five days,” Novak stated. “With each level, you had a guaranteed amount of daily interest on your money for a guaranteed set amount of time.”

Novak became more comfortable over the coming months, transferring almost $280,000 to his crypto account between January and April 2024.

“There were signs,” he admitted. “Some banks tried to stop me. I’m a determined person. I just went around them or found another bank that would.”

Around April, though, Novak noticed Danner becoming distant and less communicative. Things came to a head the same month when he tried to withdraw some funds, only to be told he would need to pay a “gas fee” for the transaction. This resulted in him being locked out of his account.

“One of my best friends sent me a text that he had received from a friend about something called pig butchering. I read it and I realized what had happened.”

Pig butchering scams are among the most common kinds of crypto fraud. They involve a criminal building a rapport with the victim and enticing them into some kind of investment scheme. These kinds of scams are on the rise, aided increasingly by AI, and the amount defrauded from victims surged 40% in 2024.

Months later, Novak is still maneuvering to recover the funds he lost.

He laid out three key tips for avoiding crypto scams like the one he encountered.

1. Avoid conversations with strangers who want to communicate primarily over WhatsApp, as it often means they are in a different country. Novak noted that when Danner asked him to do this, it should have been the first red flag.

2. Avoid offers to have the lost funds released for additional money. Novak refused to do this when Danner suggested it after she had cut him off. He also recommended speaking with a crypto recovery firm afterwards.

3. When it comes to crypto, there is always a transaction record. Novak urges victims to take action and seek help rather than feeling shame about being scammed.

Raviv added that awareness of rising crypto scams is of paramount importance, but there’s one warning sign that should be recognized above all others.

“When you are being pressured to invest, that’s a huge red flag,” Raviv said.

Read the original article on Business Insider