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Top Investment Fraud Scams in 2023 

Top Investment Fraud Scams in 2023 featured by top securities fraud attorneys, the White Law Group

Investment Fraud Scams – Threats in 2023

According to an investor alert issued by the North American Securities Administrators Association (NASSA),  investment fraud scams may be as close as your email, your social media accounts, or on a telephone call. (NASAA) explains the most common potential threats to investors in 2023. 

Digital Asset Scams – Crypto Scam 

Digital asset scams are becoming quite popular because fraudsters can use online communications to quickly and efficiently reach many potential victims. These types of investment fraud scams typically use fancy imagery and professional videos to lure you into investing in “lucrative financial instruments,” but the sellers are often not registered or licensed to sell securities. 

These fraudsters claim to provide safety by removing all economic risk from their investments.  Investors should remember that there is no such thing as removing all risk. 

According to a recent study by Chainalysis, a cryptocurrency tracing and blockchain analysis firm says that last year, 1 in 4 new cypto tokens were scams. According to the study, one form of pump-and-dump schemes, those carried out by the creator of a new token, rather than scammers who manipulate one that already exists for profit. 

In a pump-and-dump scam, the fraudster “pumps” the price of an asset they hold, hyping it without reason, and then sells their entire holding without warning. That causes the value to dive, thus “dumping” the devalued asset on their victims.  

Pig Butchering Scheme (Affinity Fraud) 

According to NASSA, another huge threat in 2023 is a pig butchering scheme, a type of affinity fraud. A pig-butchering scheme, which prays on the victims’ emotions, begins when the fraudster develops a relationship before soliciting more and more investments. After draining the victim’s bank accounts, the promoter simply disappears with the money. The name comes from the practice of fattening a pig before slaughter, and many modern pig-butchering schemes are associated with digital asset frauds. 

In one example, a scammer disguised as a romantic interest on a dating app persuaded a woman to invest gradual sums of money into an apparent cryptocurrency. Over time, she put almost $46,000 into the fraudulent investment, before she was blocked from withdrawing her money and her “love interest” disappeared. 

Social Media Investment Fraud Scams – Watch out for Finfluencers 

According to NASSA, the third most popular investment fraud scam in 2023 is perpetrated through social networking. Investment promoters increasingly are logging on to find investors … and their money. 

Social media has become inundated with financial content, leading to the rise of the financial influencer or “finfluencer. 

A finfluencer, often a celebrity with a large following on social media, has the ability to influence the financial decision-making process of others through promotions or recommendations on social media. While these finfluencers may not be intentionally scamming anyone, since they are typically compensated by the business offering the product or service, the platform or platform, there are potential conflicts of interest. 

In one example a finfluencer enters into agreements with a company to promote its products through her Instagram, Facebook, TikTok and Twitter accounts. The celebrity fails to disclose the compensations she is receiving from the company to her social media followers. 

This information is all publicly available and provided to you by the White Law Group. 

Please contact The White Law Group at 888-637-5510 for a free consultation with a securities attorney. 

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington. For more information on the firm, visit WhiteSecuritiesLaw.com.   


Tags: , , , , Last modified: April 24, 2023