Consumers note: Bitcoin trading This month, cybercriminals will make more than $90,000.
“This is going to cause a lot of FOMO and urgency around Bitcoin investing and Bitcoin payments,” said Eva Velasquez, president and CEO of the Identity Theft Resource Center. Scammers “love, love, Loves to exploit external events, create chaos, create a sense of urgency, and steal your hard-earned money.”
The issue is further complicated by the fact that reputable sources are openly discussing legitimate strategies for making money with Bitcoin. That, coupled with advances in artificial intelligence technology, makes scams appear more real even to more experienced investors, industry professionals say.
In light of the fact that the FBI’s Internet Crime Complaint Center has received more than There were 69,000 complaints last year Losses related to cryptocurrency fraud are estimated to exceed $5.6 billion. Losses related to these complaints account for nearly half of the total reported fraud losses.
With that in mind, here’s how to identify and avoid the latest crypto scams:
“Elon Musk won’t double your money”
Common scams today include false bonuses in exchange for initial investments, fake token promotions, phishing emails or text messages that appear to be from reputable cryptocurrency companies or exchanges, Ponzi and pyramid schemes, or involve fraudsters following Pig-killing scams that build trust over time often involve posing as a friend or romantic partner before convincing the victim to invest in a fake cryptocurrency platform.
The plan also frequently cited cryptocurrency enthusiasts and high-profile figures such as Tesla CEO Musk. Scammers have been spreading fake Elon Musk videos Including fake live streams to make it appear as if he was talking about specific cryptocurrency opportunities. In one of the scams, thieves tried to lure investors into scanning a QR code before the “live broadcast” ended. Investors were reportedly promised to double the amount of cryptocurrency they deposited Reported by Engadget.
“If you send crypto to Elon Musk, you’re not going to double your money,” said Merrick Theobald, vice president of marketing at cryptocurrency payment service BitPay.
These types of scams are likely to proliferate because of Musk, who consistently makes headlines, takes a more prominent role in President-elect Trump’s orbit and was chosen to co-lead the proposed Department of Government Efficiency. The Trump administration is also expected to become a promoter of cryptocurrencies, and legislation supporting cryptocurrencies is expected to be one of the first legislative efforts taken by the new Congress.
Coinbase warns scammers will prey on your fears
Scammers also prey on fear to lure victims.
Coin Library Several scams have been seen where cyber thieves send a text message claiming that a cryptocurrency owner’s account has been compromised. Jeff Lunglhofer, chief information security officer at Coinbase, said that if the user replies to the text message, the scammer will try to steal additional information, such as the cryptocurrency owner’s mnemonic phrase, allowing the thief to empty the account. He added that people fall for scams because it all seems reasonable and the scammers make them believe their assets are at risk.
If you receive a text message or email claiming there is a problem with your cryptocurrency account, please do not reply or click on any links. Instead, go directly to the provider’s website or call the phone number attached to the provider to check your account, Theobald said.
Be skeptical of one-time promotional offers
Scammers sometimes send emails or place ads on social media offering one-time promotions for investing in cryptocurrency. Howard Greenberg, president of the American Blockchain and Cryptocurrency Association, a nonprofit trade association, said the ads often look like legitimate offers from reputable companies that people may be familiar with or have done business with in the past.
But Greenberg said there might be a letter missing from the URL, and if you click on it, you’ll see something that looks an awful lot like the homepage of a well-known website, which can confuse people even more. In fact, cryptocurrency owners are plugging their credentials into scam websites. “Before you realize you’ve landed on a fake website, your money is gone,” Greenberg said. “There’s no way to resolve a dispute like there is with a credit card.”
To avoid this problem, he recommends people bookmark the websites of legitimate providers they use. This way, investors can go directly there to buy cryptocurrencies, and they won’t accidentally fall into a scam by clicking on someone else’s link. Additionally, he recommended that people only buy cryptocurrencies at reputable exchanges, which include Coinbase and Gemini. “You don’t want to use an unreliable exchange in Liechtenstein,” Greenberg said.
How families get scammed
There’s an adage that goes, “If it sounds too good to be true, it probably is,” but when it comes to cryptocurrency scams, people still fall for them. Sometimes it’s because they don’t recognize the warning signs. These include offers that seem too good to be true, pressure tactics or unrealistic promises of rewards. Industry professionals say doing a little homework can save a lot of money and hassle.
A family member of Yaya Fanusie, Director of Anti-Money Laundering and Cyber Risk Policy at the Cryptocurrency Innovation Council, was recently defrauded by a cryptocurrency scammer. The company, said to be founded by a famous mathematician, advertises a guaranteed return on investment of 150%. Fanusie did some digging on behalf of the relative and discovered that the supposedly famous mathematician had only a few dozen followers on LinkedIn. Fanusie was also suspicious because of the high investment guarantees and because his relatives were asked to communicate with the company via What’sApp, which is end-to-end encrypted to provide additional protection to scammers.
Another red flag, Velasquez said, is if the organization requesting funds claims that cryptocurrency is the only payment option. “I would be very, very wary of any transaction where the only method of payment is through cryptocurrency.”
Detailed research on new coins and cryptocurrency companies
Fanusie advises potential investors to search online for the background of any company they are considering doing business with, including where and when it was incorporated. He also urged potential investors to check out Fincen’s website to determine whether the provider they are considering is regulated as a money services business. If a company claims to be an investment firm, it’s worth checking with them U.S. Securities and Exchange Commission See if it’s registered, he said.
“You can’t believe what they say,” he said.
Potential investors should also take the time to ensure that any digital currency they consider purchasing is legal. If the coin is not listed on mainstream websites, it may not be legitimate, or it may be obscure and therefore riskier. One way to verify the legitimacy of a coin is to check it on a price tracking website such as Coin Gecko or coin market cap.
“Often, if you do a little verification… you find that things are not always what they seem,” Fanucci said.
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