Warning from Electric Capital Co-founder
Investors are being cautioned by Avichal Garg, the co-founder of Electric Capital, a crypto-focused VC firm, about a potential disguised crypto scam. This warning comes after the firm raised $300 million for its third fund in September and is now being targeted by scammers.
Scammers Masquerading as Electric Capital Representatives
Garg revealed that the scammers are posing as representatives of Electric Capital and setting up meetings with individuals. They then deceive these individuals into sending money before making any investments.
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Unfortunately, scammers are pretending to be @ElectricCapital, setting up meetings, and asking people to send them money before investing.
Electric Capital will *never* ask you to send money before receiving an investment.
We will never reach out cold via Telegram. We almost…
- Avichal - Electric ϟ Capital (@avichal) November 27, 2023
“Ultimately this is a social engineering attack, so there will always be an angle the scammers will try to take. It will likely get worse in the height of the next bull market.”
Social Engineering Attacks in Crypto Scams
Social engineering attacks are commonly used in crypto scams to gain unauthorized access to sensitive data, crypto wallets, and accounts. These attacks can include phishing emails, baiting, pretexting, and more.
Garg emphasized that Electric Capital will never ask users to send money in advance of receiving an investment. He also clarified that the company has limited official communication channels and only sends emails from the electriccapital.com domain.
To combat impersonation, Electric Capital is implementing additional verifications on social media channels.
Fund Falsely Represented as “Electric”
A recent cyber threat intelligence report by financial advisory firm Kroll revealed an increase in social engineering scam tactics in 2023. Garg explained that the scammers conducting this scam actually perform due diligence and pretend to be from Electric Capital. They entice victims into becoming limited partners (LP) in a bogus “Electric” fund and request money.
Since people are asking how the scam works:
- scammers pretend to be EC & do actual diligence (!)
- scammers tell the founder to become an LP into an “Electric” fund and to send money
- claim that once diligence is done and founder is an LP in Electric, they will get investment- Avichal - Electric ϟ Capital (@avichal) November 27, 2023
Garg’s warning comes after a SIM swap attack on the smart contract security marketplace Code4arena’s X account, where hackers posted a scam airdrop endorsed by VC firm Paradigm.
Hot Take: Electric Capital Raises Alarm on Disguised Crypto Scam
Electric Capital, a crypto-focused VC firm, has issued a warning to the crypto community about a new disguised crypto scam. Co-founder Avichal Garg alerted investors to scammers posing as representatives of Electric Capital and deceiving individuals into sending money before making any investments. Garg emphasized that Electric Capital will never ask for money in advance and has limited official communication channels. Social engineering attacks, such as phishing emails and pretexting, are commonly used in crypto scams to gain unauthorized access to sensitive data and accounts. The firm is implementing additional verifications on social media channels to combat impersonation. This cautionary message follows a recent SIM swap attack on Code4arena’s X account.
