Doesn’t it seem like everyone is investing in cryptocurrency lately? Bitcoin, Litecoin, Dogecoin – they’re all hot targets for investors! As their values soar and plunge, discussion about cryptocurrency only increases.
Cryptocurrency’s popularity hasn’t only attracted investors, however. Scammers have also been trying their best to make a fortune off the allure of digital currencies, by swindling people with investment scams. Continue reading to learn how cryptocurrency scams work and how you can avoid them!
How much loss have cryptocurrency scams caused?
According to the FTC, there were 6,792 cryptocurrency investment scams reported between October 2020 and March 2021, totaling losses of more than 80 million dollars. The average amount lost was $1,900, and the average loss for people aged 50 and above was even higher at $3,250. Plus, there were 12 times as many reports, and the losses were 10 times greater than in the same period 12 months ago!
4 common cryptocurrency scams
1. Cryptocurrency giveaway scams
We have heard way too many stories about cryptocurrency giveaway scams. The scammers will most often use celebrities’ or famous companies’ names, such as KFC, Tesla, or Elon Musk in these scams, too.
Using text messages, emails, or social media platforms like Facebook, Steam, and Discord, scammers impersonate these recognizable names and falsely claim that they are giving away free cryptocurrency.
- On Twitter: BTC Giveaway Scam
Scammers compromise verified Twitter accounts and change the account name to “SNL” or other big brand names, using it to post Tweets in replying to Elon Musk about giving away Bitcoins through a link:
The link is a phishing link. If you click on it, you will be lured to enter personal information or other sensitive credentials.
- On YouTube: Dogecoin Scam
Scammers are also spreading similar scam messages about Dogecoins on YouTube. They promote a fake Dogecoin website using an account named “SNL News Live” (impersonating the legitimate SNL YouTube channel):
Scammers promise you that they will double your Dogecoin. You will have to send them any amount of Dogecoins, and in return, scammers just take all your Dogecoins away. Be careful and do not fall for it!
- Via text messages
Posing as Tesla or other famous companies, scammers also send fake text messages about cryptocurrency giveaways to lure you. You’ll be prompted to click on an embedded link to register for the giveaway campaign. Unfortunately, all the data you submit will end up in the scammers’ hands, likely to be used for other scams like identity theft, and you’ll certainly never see any of the promised cryptocurrency!
2. Fake cryptocurrency websites
Scammers create fake cryptocurrency trading platforms to exploit victims. They often use fake testimonials or trading records to make the websites appear trustworthy.
Scammers create fake cryptocurrency trading platforms to exploit victims. They often use fake testimonials or trading records to make the websites appear trustworthy. Initially, after the victims have made their first deposits and a handful of seemingly successful investments, the sites seem perfectly legitimate.
However, as they watch their investments continue to grow, the victims feel encouraged to deposit even more money. It is then that the scammers spring the trap. They’ll decline any requests for withdrawals, oftentimes even shutting down the sites altogether. Contacting “customer service” is never any help, and the victims are sometimes even duped into parting with more of their money. Of course, they’re never going to see even a cent of it again.
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3. Cryptocurrency scams via romance scams
Some scammers trick people into investing in cryptocurrency using a romance scam. It’s scamception!
They first reach out to their victims via social media or online dating sites and get close to them. After the victims believe they are in a relationship, scammers start to talk about investment opportunities in cryptocurrency, luring victims to join in by wiring money or through phishing links to fake investment websites.
A Reddit user detailed how he was duped into parting with his money by a romance scammer:
“She convinces me to give her $300 to flip, she doubles it to $600 and gives me that, I can part easily with $300, and she has me hooked. Eventually she wants to do my entire bank, I decline, but send her $3,000 instead. She “claims” it was successful, but now needs $3,000 more to get a total of $60,000 out.”
Scammers will do their very best to squeeze every last cent out of their victims. When the victims finally realize, they vanish.
4. More cryptocurrency scams by impersonators
- Posing as government agencies or companies
Just like we saw with the giveaway scams, scammers love to impersonate celebrities or companies to trick people. However, we’ve also seen them pretend to be the government! For example, here they pretended to be from the Social Security Administration and asked victims to pay with cryptocurrency.
They also recently posed as Coinbase and sent text messages with phishing links to victims, falsely claiming that there were issues with their accounts. Scammers can then take over their accounts with the credentials the victims enter.
- Fake news
Scammers created a fake Mirror news page featuring Elon Musk, claiming to offer investment opportunities to the public.
The article details how Elon Musk has made a fortune through a new trading platform. On the site, there’s a button for victims to “register” for the fake platform.
Although the layout of this website looks similar to the legitimate one, all the buttons and links lead to the same web address: a scam cryptocurrency transaction platform called “Bitcoin Evolution.”
Any money deposited on the site by the victims will never be seen again.
Some red flags:
According to the FTC, the big things to watch out for are:
- Promises of guaranteed huge returns
- Claiming to have a better way to make a profit with cryptocurrency
- Websites insisting users use cryptocurrency
How to protect yourself from cryptocurrency scams:
- Be smart with your personal information.
- Never invest unless you fully understand the investment. Check if your broker/adviser is registered on the FINRA’s Broker Check website or the SEC Investment Adviser Public Disclosure website. The Securities and Exchange Commission (SEC) also has a list of questions that prospective investors should ask before handing over their money.
- Browse the web safely using Trend Micro Check. (it’s completely free!)
- Download Trend Micro Maximum Security for even more protection, including Web Threat Protection, Ransomware Protection, Anti-phishing , and Anti-spam Protection. Click the button below to give it a try:
If you spot a cryptocurrency scam, report it to the FTC at ReportFraud.ftc.gov.
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