Has Your Broker Accused You of Money Laundering?
When we investigate suspected scam brokers, we often run across dodgy unlicensed financial companies that try to funnel illegal funds through accounts and platforms. However, once in a while, we see problematic brokers who accuse customers of money laundering as a pretext to avoid allowing them access to their accounts.
It can be shocking to have a broker or an exchange accuse you of money laundering, especially if all you’ve intended to do is to make some money trading assets. However, according to the Better Business Bureau, this is exactly what happened in the case of a New York customer of Loboex.
How Did This Happen?
It all began when a New York resident we’ll call Charlie became fascinated with cryptocurrency trading and decided to take a huge risk with his retirement account. He devoted $600,0000 of money from his 401(k) to trading digital currencies.
First of all, digital currencies are a risky asset. They fluctuate in value and many aren’t levered to real-world securities, so they are perceived as volatile. Many expert investors have expressed reservations about cryptocurrencies, and even those who are enthusiastic don’t recommend investors devote more than 10% of their funds to crypto investments.
The other problem was that Charlie didn’t insist on trading only with a regulated broker. Most crypto brokers are unlicensed. This doesn’t make it okay. It’s best to seek out fully regulated brokers that offer cryptocurrency, rather than take a chance on an unlicensed platform.
Charlie deposited $600,000 from his retirement account into Loboex’s unlicensed platform. He thought he was making a lot of money because his trades showed positive returns. However, later he discovered these were fake and artificially generated results that didn’t reflect actual trading.
Charlie Gets Locked Out of $600,000
It all seemed to be going well for Charlie until suddenly Loboex told him that his account was locked after he requested a withdrawal. At first, the suspected crypto scam told him that he hadn’t properly verified his account. This didn’t seem difficult to sort out. Charlie sent photo ID and additional information.
However, Loboex still wouldn’t unlock his account. They upped the ante on their excuses. They told Charlie that they suspected him of money laundering and were closing down the $600,000 in his account.
This was out of the blue and of course, was shocking. Usually, it’s banks and regulated brokers that take this kind of fierce action against suspected criminal activity. They must justify why they are doing this by citing a tangible reason.
For instance, if the funding sources are ambiguous, if the transactions are extremely complicated and involve several entities, and if the client has various names and connected accounts, these all could be grounds for suspicion. In addition, any unusual transaction activity may be a reason to suspect that something may be wrong.
However, none of this applied to Charlie. The only major transaction he made in his brokerage account was his initial $600,000 deposit, which he proved came from his 401(k) and from relatives and not from illegal sources.
From Money Laundering to Bribes
This sounds crazy, but the situation got crazier. Even after closing down Charlie’s account on suspicion of money laundering, they said they would open it again in 7 days if Charlie deposited an additional $180,000.
Basically, they are saying, “We suspect you may be committing crimes, but if you pay us $180,000, we’ll forget about it.” Of course, at this point, Charlie realized that this broker was shady, and is seeking fund recovery from this crypto scam.
Is Fund Recovery Possible from a Crypto Scam?
Dealing with devious crypto scams can be a challenge. However, at CryptoComplaint. We’ve dealt with many successful crypto recovery cases. It’s important to act quickly and report a suspected fraud as soon as possible. We’ll work closely with you to help you recover your funds.
Have You Lost Money to an Online Scam? Talk to Crypto Complaint Experts
If you’ve lost money to a fraudulent broker or crypto scam, don’t suffer in silence. Speak to CryptoComplaint experts right away. We will consult with you, create a strategy and launch a full fraud investigation. Our team is adept at tracking down funds on the blockchain and dealing with law enforcement and financial authorities to help you achieve a successful outcome to your claim.
Headlines now and again features stories about major corporations getting hacked. According to new surveys, not only large corporations but SMBs or small and medium businesses run a substantial risk for hacking. It is estimated that 50% of all SMBs suffer from malware attacks. Perhaps more upsetting is that of these companies that experience data breaches, 50% go out of business within 6 months after the attack occurred.
This demonstrates the destructive effect hacking has on companies and customers who have their data compromised. Individuals who in their own lives take extensive precautions to avoid cyber threats may be the target of identity theft simply for doing business with a company that was hacked. The effect of this is that a company may lose loyal customers and suffer from a PR disaster.
Whether it is hacking, a malware attack or a crypto scam, or forex trading scam, it is important to file a complaint and notify authorities of the problem immediately so they can track down the people behind the hacking. Additionally, using the services of a fund recovery company can help you recoup the losses following a security breach and help you and your clients retrieve your funds.
CryptoComplaint experts provide consumers with information about financial services and can assist people who have been affected by the hacking, identity theft, CFD scams, crypto scams, forex trading scams, and other forms of financial fraud. Our team has the resources to assist with crypto complaints and can provide guidance to consumers and get them started on the fund recovery process.
Methods Hackers Use to Attack SMBs
There are many ways cybercriminals attack companies. The following include:
- Mass spam emails
- Spear Phishing
- Social engineering and impersonation
- Calls and low tech methods
Many hackers work on a massive scale. They send out messages to as many recipients as possible and hope that someone will click on a link or download a document laced with malware or spyware. Hackers have become more sophisticated through the year in their hacking methods. The Nigerian prince fraud is a famous example of an obvious fraud that unfortunately many people fell for.
Now, hackers will be more likely to create convincing decoys of emails from established companies such as Microsft or Google. The logo may look exact and the tone is professional and believable. They will tell the recipient that they need to verify account details or for some information about something.
The email will feature a link or something to download. Once the recipient takes this action, malware or a virus will find its way into the computer or device. Through malware or spyware, the hackers can gain access to accounts and the network.
Even if the emails appear to be convincing, many people do not click on the links because they can sense that this is a mass mailing campaign and not targeted to them directly. When attempting to sabotage and steal data or money from a company, hackers may be more likely to try spear-phishing tactics, or targeting certain employees directly, particularly those who have more access to data or accounts.
In a spear-phishing attack, the hacker will use social engineering to impersonate someone from the IT department or a manager with a special request for detailed customer data or to gain access to the employee’s device. When this is granted, the device is vulnerable as is the network and the data is compromised.
Since so many people are worried about cybercrime, some hackers have realized one easy way to throw people off track is to call them. Cold calls from someone pretending to be a technician are common and even savvy employees are easily fooled because they expected scammers to try to trick them online rather than on the phone.
Don’t think that criminals are above going through the trash to find account information. If they know where the company is located, they may go through the recycling bin. Shred all sensitive paper documents before disposing of them. In our digital world, we often overlook how much information about ourselves is still on paper that is casually discarded.
5 Ways to Keep Your Company Safe From Hacking
- Install and upgrade anti-virus software
- Verify all requests for sensitive information
- Look at details such as the domain name of emails
- Require two-step verification
- Ensure Best security practices are enforced throughout the company
Installing and upgrading anti-virus software and ensuring that all other employees of the company do the same, is the best way to avoid malware and spyware. Even if hackers manage to get past the network, advanced cybersecurity software will detect and prevent a malware attack immediately. Software is a safety net for when best practices are not used properly or if there is some mistake.
Do not automatically comply with requests for sensitive information, even if the communication seems to be from within the company. Always call, ask for an email or communicate with a manager to determine the authenticity of requests for client data or access to networks and devices.
Be aware that hackers can make communication look as if it was sent by someone you know. In that case, look for subtle differences, such as a fishy domain name on an email or unusual phrasing, if you have received communication from that department in the past. A two-step identification requirement is always a good idea to protect against stolen passwords.
Creating best practices for your company to avoid cybercrime is an excellent way of protecting your funds and your customers’ data. Ensure everyone in the company adopts these best practices and incorporates them in their daily tasks.
Prevention may not be foolproof, but it can improve your company’s security. If in spite of everything, your company’s data is breached, it is essential to report the incident immediately. Time is of the essence also with regard to fund recovery. Working with a fund recovery company can greatly improve your company’s ability to bounce back from a data breach.
Has Your Company Been Affected by Hacking? Talk to CryptoComplaint Experts
Consult with CryptoComplaint experts immediately if your company has been hacked or if you have been the victim of identity theft, crypto scams, or forex scams. Our team can provide solutions and advice on how to seek restitution and recover from fraud.