Have you had a phone call from police about your cryptocurrency wallet?
Be on your guard – you could be about to be scammed.
That’s the clear warning issued by police in England, as it was disclosed how nine people have lost a combined £1 million in a phone-related cryptocurrency scam.
According to the Kent police force, scammers have been exploiting personal information of residents that was included in a data leak to create fake Action Fraud reports.
(It is important to note that Action Fraud is a legitimate organisation, which acts as a national centre which collects reports of fraud, scams and cybercrime from individuals and companies in the UK. It works with police in England, Wales, and Northern Ireland to co-ordinate response across the country.)
Once the fake Action Fraud reports have been created, the intended victims are contacted by scammers impersonating police officers and reassured that an investigation has been launched into the “fraud.”
The bogus police officers then tell their target that they should expect a call from the host of their cryptocurrency wallet.
Some time later a further phone call is received, claiming to come from a security officer, who asks the victim for information about their cryptocurrency account, including the seed phrase (typically a 12 or 24-word phrase) which controls access to their cryptocurrency wallet.
A seed phrase is the secret sequence of random words that stores the data required to access or recover the funds in your cryptocurrency wallet. They are highly resistant to hacking because their complexity means that there are billions of combinations, and brute-force attacks are impractical.
So sharing your seed phrase with anybody is highly dangerous.
Sure enough, the fraudsters posing as police now have all the information they require to steal your cryptocurrency funds.
The impact of cryptocurrency scams can be devastating, not just to your finances – but also to your emotions. Victims can lose significant amounts of money, and are often frustrated that the anonymity and decentralisation of cryptocurrency makes it a real challenge to trace and recover stolen funds.
Detective Sergeant Darryll Paulson of Kent Police advised people to be vigilant:
“I urge anyone contacted by someone claiming to be from a crypto host, or from the police, not to give out any personal details. Scammers are becoming increasingly more calculating in their methods to defraud their victims into losing a substantial amount of money and will often create urgency in the situation, such as telling them they need to act now to stop their funds from being stolen. Don’t be embarrassed about reporting a scam, it only takes a second to be distracted and fall victim.”
Make sure to always verify the identity of anyone contacting you who claims to be from law enforcement or a financial institution. A genuine police officer will not ask you to confirm sensitive information over the phone.
If in doubt about somebody’s legitimacy, Kent Police suggests that you ask to take their details and end the call. They then advise that you wait for at least five minutes for the call to clear and then call 101, or 999 in an emergency, where a call handler will be able to verify if the caller was genuine.