Electric Capital Co-Founder Avichal Garg warned the crypto community about a new method fraudsters are using to steal money from investors.
Scammers have started pretending to be venture capital firms in a bid to lure crypto startups to believe they’re talking to legit investors.
In an X post on Nov. 28, 2023, Electric Capital Co-Founder Avichal Garg said fraudsters are now setting up meetings, and “asking people to send them money before investing.” The Electric Capital head emphasized that the Palo Alto-headquartered firm “will never ask you to send money before receiving an investment.”
According to Garg, scammers are offering crypto entrepreneurs to become a liquidity provider in an “Electric” fund and ask for money to be eligible to become a member of the fund.
He added the firm only makes contacts with emails from its official website and is currently working with Google to get a verified email domain. According to the Electric Capital Co-Founder, the latest scheme is a social engineering attack, so there will “always be an angle the scammers will try to take.”
Garg’s warning comes shortly after scammers managed to get control over an X account for Code4arena. In an effort to defraud users, scammers have published a post announcing an airdrop of ARENA tokens endorsed by Paradigm, a San Francisco-based crypto venture capital investment firm.