The Commodity Futures Trading Commission’s (CFTC’s) Office of Customer Education and Outreach has released a customer advisory alerting messaging app users to beware of schemes to defraud them of assets, specifically crypto assets.

Fraudsters are exploiting the default settings of commonly used messaging apps, telephone networks, and mobile devices to lure users into crypto pump-and-dump schemes and other scams.

The customer advisory, Use Caution Responding to Messaging Apps, informs users of the default settings of popular messaging apps that allow scammers to add random or targeted phone numbers to group chats that are used for fraudulent activity. The advisory also notes that default SMS text settings on smart phones allow for a greater number of spam texts that can result in fraud.

Oversized returns

The advisory reminds people to be suspicious of any messages you receive via WhatsApp, Telegram, SnapChat, WeChat, SMS texts, or other apps that promise guaranteed oversized returns.

“People who use these apps may not be familiar with the risks and frauds commonly associated with crypto assets,” said Melanie Devoe, director of the CFTC’s Office of Customer Education and Outreach. “Receiving a group message promising 300% or 1,000% returns with zero risk or getting in on a supposed crypto opportunity, can be enticing, but it is best to not engage.”

The customer advisory tells app users what they should do if they receive a message from an unfamiliar person or number saying “you’ve been added to a messaging app’s group chat”:

• Do not reply.
• Delete the messages or group discussions, block the senders and send text messages to junk or forward it to 7726 (SPAM).
• Change your privacy settings to protect your information and reduce future spam.
• Most apps, mobile carriers and devices provide ways to restrict who may contact you or block specific numbers. Check each messaging app’s settings. Next, check your carrier’s account app settings, and your device settings. Many major carriers also offer free SMS spam-blocking or call filtering apps that can be added to your phone.

Verbiage to look out for

The CFTC notes that people might see a message that they’ve been added to a group, then other messages afterward. “It’s all fake, lies designed to steal your money,” the CFTC reminds people.

Some common verbiage used in these fraudulent outreach efforts can include:

• talking about cryptocurrencies, especially any trading of crypto futures with leverage;
• “cooperative trading projects” (also called pump-and-dump schemes);
• earning 100, 500, 1,000% profits;
• references to advanced artificial intelligence;
• allusions to can’t-miss investment programs; and
• testimonials from other group members.

The advisory reminds individual investors that they should only trade futures with regulated individuals and firms that follow strict qualification, supervision, and customer protection requirements and that trading with unregistered companies that don’t have a physical presence in the US can substantially increase the chance of fraud risk.

Checking each app and setting new privacy settings, deleting unwanted groups, blocking certain ones and reporting problematic messages to the platform are suggested practices. For SMS and phone messages, the advisory says to check the carrier’s apps and account settings, since most major carriers offer free SMS spam and call blockers.