Warning: Scammers Posing as Venture Capital Firms to Target Crypto Startups
Avichal Garg, Co-Founder of Electric Capital, has issued a warning to the crypto community about a new scam tactic being used by fraudsters to steal money from investors. These scammers are pretending to be venture capital firms in order to deceive crypto startups into thinking they are engaging with legitimate investors.
The Scam and Electric Capital’s Response
Garg revealed that the scammers are setting up meetings with unsuspecting individuals and asking them to send money before making an investment. However, Garg made it clear that Electric Capital will never request money prior to receiving an investment. He also emphasized that the firm does not make cold outreach via Telegram and typically contacts individuals through mutual connections.
Social Engineering Attack
Garg explained that the scammers are enticing crypto entrepreneurs by offering them the opportunity to become a liquidity provider for an “Electric” fund, but requiring payment to be eligible for membership. He stressed that Electric Capital only communicates through emails from its official website and is working with Google to establish a verified email domain. Garg concluded by stating that this scheme is a social engineering attack, highlighting the need for vigilance against scammers’ tactics.
Rising Scam Incidents
This warning follows an incident where scammers gained control of an X account for Code4arena and attempted to defraud users by announcing a fake token airdrop endorsed by Paradigm, a crypto venture capital firm based in San Francisco.
Hot Take: Stay Alert and Verify
As fraudulent activities evolve in the crypto space, it is crucial for investors and startups to remain vigilant. Always verify the legitimacy of investment opportunities and be cautious when sharing personal or financial information. Remember, reputable venture capital firms will never ask you to send money before receiving an investment. Stay safe and protect your assets in the fast-paced world of cryptocurrencies.
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