Crypto Scammers are Exploiting Singapore’s Safe Reputation

Crypto Scammers are Exploiting Singapore’s Safe Reputation
23 November 2022

Singapore is synonymous with safety but its zero-tolerance for crime has lullled the crypto community into a false sense of security.

Most recently, five people fell victim to a scam that lost them over US$10 million. Scammers had created a counterfeit domain of the former Singapore International Monetary Exchange (Simex) to lure their victims in.

Between May and August, scammers lured their victims into participating in a crypto scam that encouraged them to invest in fraudulent platforms. Funds were instead directed to private wallets.

Scammers created seven fake domains of Simex, which merged in 1999 with two other companies to form the Singapore Exchange (SGX). The domains were used to create websites that belonged to a trusted company but were secretly controlled by the scammers themselves.

Fraudsters would target their victims on dating apps or social media, sometimes introducing themselves after sending a text message they claimed to have mistakenly sent to the wrong number.

“Scammers initiate relationships and slowly gain their trust, eventually introducing the idea of making a business investment using cryptocurrency,” the US Department of Justice (DOJ) explained. The DOJ is overseeing the case as the five victims are located in the US.

A court in the US state of Virginia has authorised the seizure of these domains.

Read more: Singapore Crypto Scams Have Surged 5x Since 2019; Migrant Workers Targeted

“Victims are then… persuaded to invest money. Once the money is sent to the fake investment app, the scammer vanishes, taking all the money… often resulting in significant losses for the victim.”

Although SGX has not operated under Simex since the merge, it seems the victims found confidence in the name nonetheless.

“SGX Group does not operate any investment platform, including a platform for individuals to trade crypto-products or any other investment product,” an SGX spokesperson said.

“Investors can access SGX-listed products only via a licensed broker which will have its own investment platform. As such, SGX also does not directly accept monies for the purpose of investment and so will not ask for such funds.”

Not so safe Singapore

Crypto scams reported to the police have jumped fivefold since 2019. According to Law and Home Affairs Minister K. Shanmugam, 125 were reported in 2019, 397 in 2020 and 631 in 2021.

Speaking at the Global Anti Scam Summit earlier this month, Camill Cebulla, the European sales director of Singapore-based cyber-security company Group-IB, said crypto scams had increased by 335% in the first half of 2022 alone compared to the same period in 2021.

Group-IB identified over 2,000 domains registetered to promote crypto scams in the first half of 2022. Around 20,000 vieweres were found for each fake crypto scam.

Cebulla said the company has also been monitoring crypto wallets controlled by scammers and found that between February 16 and 18, over US$1.68 million was being stolen through 281 transactions.

Uphill battle

Last month, Interpol set up a dedicated crypto crime unit in Singapore where the agency’s Global Complex for Innovation is based.

The announcement came just a week after Interpol issued a “red notice” to law enforcement agencies around the world for the arrest of Terraform Labs co founder Do Kwon.

Read more: Interpol Joins Fight Against Crypto Crime

However, cracking down on crypto crimes is evidently a much harder task than it seems. As the majority of scams are coming from outside of Singapore, the power of ocal law enforcement is limited.

“Our ability to solve these cases will depend on the level of cooperation from overseas law enforcement agencies, as well as their ability to track down these scammers,” he said in October.

“Where the money has been transferred overseas, recovery is even more difficult.”

Market participants are thereby urged to do their due diligence before investing their money, and to not let greed cloud their judgement. That said, telling crypto degens to not be greedy is like telling Do Kwon to not be shady.

Blockhead Team
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