Crippled By Cryptocurrency: If You Don't Know It, Don't Invest in It

An investment broker contacts you about a great venture opportunity that guarantees a large financial gain. They ask you to invest using cryptocurrency, which is something you know little about. The broker works to gain your trust and money for several months. Then you check in to see how the investment is going but the broker is gone, and your money has disappeared into thin air.   

The flashiness of cryptocurrency is one of the newest avenues for scammers.  

What is cryptocurrency?

Cryptocurrency is a digital currency that exists primarily online. Because of its digital format, there are no physical coins or bills involved in transactions. 

According to the Federal Trade Commission (FTC) , there have been about 12 times more reports of cryptocurrency fraud in the last 8 months than the same period of time last year. Cryptocurrency is an easy way for scammers to trick individuals in creative ways because it’s still a new and un-charted territory for most people. This vulnerability allows scammers to be successful in their schemes.   

With the increase of fraud alerts, the FTC has come up with a few claims for potential victims to be aware of when it comes to cryptocurrency.   Here are some examples of ways scammers use cryptocurrency in their schemes:   

• Giveaway Scams. Scammers will attempt to gain victim’s faith and impersonate a famous person or celebrity in order to get them to send an “investment” in cryptocurrency. In these situations, scammers will act as a celebrity and message someone on social media, encouraging them to contribute to a fundraiser or a good cause. In turn, participants would be entered to win a meet and greet pass with the celebrity. This often works because victims have a personal attachment to someone they recognize or believe is a valid famous person.
• Online Dating. FTC scam reports have noted that scammers will communicate with people on dating apps or websites to gain confidence and then convince them to “invest” using cryptocurrency. Scammers will connect with victims on a dating app or website by gaining a connection with each other on a deeper level. When a relationship is built, scammers will try to offer a dual investment opportunity the victim should participate in with the alleged significant other. After the scammer gathers the personal information, the scammer cuts off communication and victims are left feeling ghosted.
• Impersonating Government Authorities. Victims of cryptocurrency scams have also fallen for criminal’s tricks in impersonating Social Security Administration workers. Scammers will tell victims that they owe social security and need to pay back funds through cryptocurrency or other random, digital platforms.

Always think twice when trusting someone with your money turned into a cryptocurrency investment. While it may feel like the capitalizing on the latest trend, you may be asking an expert in fraudulent activity to take your money. When it comes to investments, individuals are never investing in cryptocurrency; cryptocurrency, itself, is the investment.   

It’s normal for victims to feel embarrassed by what has happened. We encourage you to reach out and talk to a friend or family member.   

If you believe you or someone you know has been involved in a cryptocurrency scam, please use one of the following resources to report it:

• ftc.gov
• gov/complaint
• gov/tcr