A Colorado woman hired a private investigator after she lost more than $150,000 to an Instagram cryptocurrency scammer.
New documents filed in Colorado’s U.S. District Court describe how Secret Service agents froze an account – located by the private investigator — that contained some of the stolen money.
The woman first reported the scam to the Douglas County Sheriff’s Office. A report from the office says the woman believed she was in contact with Vitalik Buterin, the creator of the cryptocurrency Ethereum (ETH).
The woman was then directed to a website that contained Buterin’s image and a giveaway promotion.
“The false Instagram post said that anyone who would send 1 ETH coin would receive 2 in return,” the police report says.
After sending $158,162 worth of ETH, the woman finally realized she was being scammed. According to the sheriff’s office report, investigators believe the scammer is based overseas.
“This case was turned over to the Secret Service. This case is not prosecutable on a local level due to the suspect being in Kazakhstan,” the police report says.
The woman hired a private investigative firm that specializes in cryptocurrency fraud. After the firm was able to trace some of the funds to an online account, documents reveal investigators with the Secret Service were able to freeze the account, which contained approximately $17,000.
Paul Sibenik, CEO of CryptoForensic Investigators, said the amount lost in this scam was larger than what people typically lose.
“It generally targets people who are not knowledgeable or familiar with cryptocurrency or relatively new to cryptocurrency,” Sibenik said.
“Cryptocurrency transactions by their nature are not reversible. So once it’s gone, it’s gone.”
Crimes involving cryptocurrency scams are on the rise, seeing a 53 percent year-over-year increase in 2023, according to the Federal Bureau of Investigation’s latest internet crime report.
“Investment fraud with a reference to cryptocurrency rose from $2.57 billion in 2022 to $3.94 billion in 2023,” the report, published in March, reads. “These scams are designed to entice those targeted with the promise of lucrative returns on their investments.”
