Fraudulant websites offer refunds on FTX collapse

With the collapse of cryptocurrency exchange FTX, crypto investors that lost it all are being warned to beware of misinformation and fake websites promising to help recoup their losses. Singapore police issued a warning over the weekend about a website that says it can help FTX investors to recover their lost crypto when the company declared bankruptcy.

On November 11, FTX collapsed and filed for bankruptcy while founder Sam Bankman-Fried resigned from his position as CEO. The collapse meant that billions of dollars of crypto investments essentially evaporated and about one million customers lost everything.

The Singaporean Police issued the warning because Temasek, a Singaporean state investment firm, was a major investor in FTX. They have lost hundreds of millions of dollars in the FTX collapse. So has venture capital firm Sequoia and Japanese conglomerate SoftBank.

The fraudulent website impersonates the United States Department of Justice, using official logos. It asks users to enter their login details for their FTX accounts. Then it tells customers that if they pay legal fees they will be able to withdraw the funds that they had invested in FTX.

The website though has no connection to FTX or the Department of Justice and is likely phishing for log-in and account details while also attempting to collect payments from people who think it might save their crypto investment.

There has also been a rash of articles online promoting false information about crypto. Many fake articles frame investing in digital assets as being extremely profitable with practically no risk at all. The collapse of FTX offers a stark illustration that this is not true.

In Singapore in particular, Channel News Asia reports that police are warning about articles featuring endorsements from popular high-profile politicians including the Speaker of Parliament and senior ministers. The endorsements are, of course, false.

Authorities urge people to take common sense precautions like confirming the validity of companies pushing crypto and asking thorough questions to make sure they understand everything before investing.