Cybercrime Southeast Europe Newsletter No. 66
Dear Clients,
In the world of cryptocurrencies, new financial tools often bring both great opportunities and significant risks. One such tool is the “flash loan” — a unique form of loan that has become a favorite not only among legitimate investors but also among fraudsters.
What are flash loans?
A flash loan is a short-term loan without any collateral that must be repaid within the same blockchain transaction. In other words, the money you borrow has to be returned immediately — otherwise, the entire transaction is reversed as if it never happened. This technology enables quick and efficient execution of various financial operations, such as arbitrage (buying and selling at different prices across platforms) or position liquidations.
How do scammers use flash loans?
Unfortunately, the speed and complexity of flash loans make them a tool for sophisticated scams. Fraudsters use flash loans to manipulate cryptocurrency prices on decentralized exchanges, drain liquidity pools, and create fake investment platforms promising secure and high returns. Victims, often inexperienced investors, deposit their funds into these platforms, which disappear without a trace once they collect enough money.
Why is this dangerous?
Due to the fast and technical nature of flash loans, these scams are difficult to detect and stop quickly, leading to significant losses. Investors in the Balkans are increasingly targeted because of growing interest in crypto and decentralized finance, while education on the risks often lags behind.
How to protect yourself?
- Only invest in verified and regulated platforms,
- Avoid projects that do not provide clear information about owners and regulatory status,
- Do not trust promises of quick and easy profits,
- Educate yourself about the basics of blockchain technology and DeFi protocols,
- Follow official sources and expert analyses,
- Consult legal and financial professionals before making any investments.
Education is key
In a rapidly changing world, knowledge is your best defense. Follow our reports and training, and don’t be fooled by the glitter of false promises.
If you have questions or want a more detailed explanation about flash loans and other crypto risks, we are here to support you.
Sincerely,
Your DefendMe Team