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.”

“We will never reach out cold via Telegram. We almost always go through a mutual friend if we need to reach you.”

Avichal Garg

According to Garg, scammers are offering crypto entrepreneurs to become a liquidity provider into an “Electric” fund and ask 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 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.