We at Firi often receive inquiries from customers who wonder if various investment services and investment companies are credible or fraudulent. Here are our top tips on how to avoid fraud and deception in Norway when investing in cryptocurrencies, such as bitcoin or ethereum.
First and foremost, we want to clarify common questions about cryptocurrency and fraud.
Yes, Firi is safe to use. We are registered with Finanstilsynet as a service provider for exchanging and storing virtual currency in Norway. Firi has also set aside significant resources to keep the platform secure, avoid money laundering and expose attempted fraud. As of today, we are the largest cryptocurrency exchange in Norway and at the time of writing have around 200 000 customers in the nordics. At Firi you will find a selection of established and respected cryptocurrencies at good prices.
You can read more about saving and investing in cryptocurrency here.
Unfortunately, we do not have a full overview of who is safe or what is fraud and deception, but have uncovered and prevented a good number of fraud attempts, and now want to contribute more information.
There are many forms of online fraud, including e-commerce fraud, romance fraud, Microsoft fraud, credit card fraud, lottery and prize fraud and more.
It is often the case that fraudsters take advantage of the lack of knowledge of new and inexperienced crypto investors.
There are three things in particular that scammers try to do:
This could either mean that they are trying to trick you into sharing your password or access to your crypto wallet, or it could be that they are trying to trick you into clicking on links in emails or social media which in turn allows them to steal your personal information.
The other typical procedure is to contact you and present yourself as experts. They entice you with a good return and try to get you to send your crypto to them so that they can "trade crypto for you". What you do not know is that you will never get this money back. You can read more about this type of fraud in the section on investment fraud below.
The third approach, to trick people into sending crypto to a crypto wallet, we often see on social media. The scammers pretend to be someone else, such as Firi, and trick people into sending x cryptocurrencies to a wallet. They often promise multiplied winnings back.
You can avoid these types of scams by:
Here they are trying to get you to invest in a fake cryptocurrency project. They will typically use social media to trick people into promising that this is the newest, hottest cryptocurrency with great potential returns. They may have fake profiles and the like on social media that recommend you buy a specific coin. When people are tricked in, the price often rises very quickly. Then they will suddenly sell off all their coins, run away with the liquidity from the trading platform or the like so that the price collapses, and in that way they "pull out the blanket under the legs of" the investors. This especially applies to brand new coins that are published on so-called decentralized exchanges. Such coins can sometimes be programmed so that they cannot be sold. Fortunately, it is possible to detect such scams by doing more basic research on the relevant cryptocurrency before investing. Here are some red flags that should make you think.
Such scams are an important reason why Firi always makes a thorough assessment before we list new cryptocurrencies. We will never list cryptocurrencies where there is a risk of such "rug pull" scams.
Pump and dump scams are somewhat similar and means that scammers are manipulating the price of a cryptocurrency to go up, and then dumps all their coins on the market when to price is at its peak. Inexperienced new investors en up buying these overpriced coins and soon after the price plummets back down.
Investment fraud, or "get-rich-quick-scam", are cases where, for example, you are advertised for how you can invest as little as 100 kroner and it turns into 1000 kroner in a short time. It often entices with favorable investments in products and services that are difficult to understand, such as currency, forex, stocks, mutual funds or cryptocurrencies.
Scammers can contact you by email, phone or social media, and they are often very persuasive, polite and professional, almost like advisers, and can refer to others in the same situation as you. We also see that scammers pretend to be someone else, such as Firi, on Facebook, and steal logos and text from the company. Then they comment on Facebook posts with promises of high profits if you transfer crypto to a crypto wallet.
To get started with the investment, you have to transfer money to the scammers, where they of course promise fast and secure returns. We have reported several websites that are convincing and professional, with graphs and numbers that show good returns. In addition, some customers have informed that they have invested and managed to withdraw part of their investment, but that the problems only arise when they want to withdraw the entire investment, or when the amount has increased through several deposits.
Scammers tend to build trust by letting you take out part of your investment and give you a good idea of the service. It is not uncommon for them to eventually encourage you to recommend the service to friends and acquaintances, in addition to giving you a bonus for each person you recruit for the service.
If anything seems too good to be true, it is. What is the overall impression you are left with after reading a bit on the website?
Here are some tips and advice on how to avoid being exposed to investment fraud:
Did the company contact you directly by phone, email or via social media? It is rare for serious players to contact new customers directly in this way, but it is very common in fraud cases.
On social media, you should check if the person or company is genuine. You do this by, for example, checking how many friends they have or when they were registered.
Check if Finanstilsynet has the company listed under its market warnings.
Is the information you receive credible? Check the website and see if you can find information about the people behind the company and the service. With us, you will find, for example, more information under "About us".
Also pay attention to the e-mail address or address field and the website you are visiting. Scammers often pretend to be someone else. This especially applies to banking services, investment sites and the like.
Do a Google search on the company and any people you find on the website. Who is behind the service, and have others written positive or negative comments about the company? Be aware that scammers often write false positive comments about their own services. Therefore, read through the reviews, both positive and negative, to get an impression of whether they were actually written by a real customer of the company.
Never give away your BankID, password, card information, PIN codes or other information about yourself. A serious player will never ask you to provide sensitive information by phone or email.
The list and text are not exhaustive, but are some tips and advice that we hope are helpful when considering an investment service or a company that offers to manage your money.
If you suspect that you have been the victim of fraud, we recommend that you report the case to the police and contact your bank.
More information regarding investment fraud and deception can be found here:
Want to learn more about how to invest safely and easily in cryptocurrency? Click here here.
