![\"\"](\"https:\/\/media.eaglewebservices.com\/public\/2020\/1\/1579883951052.jpeg\")
BBB<\/i><\/p>\n
Cryptocurrency is the hot new trend
\nin investing, and much is still not understood about this buzzy,
\nvolatile digital payment system that does not rely on banks to verify
\ntransactions. This has created a fertile environment for scams,
\naccording to a new in-depth investigative study by Better Business
\nBureau\u00ae (BBB\u00ae), which states: \u201cA virtual tug of war exists between the legitimate and fraudulent use of cryptocurrency.\u201d\u00a0<\/p>\n
The study \u2013 Cryptocurrency Cryptocurrency is a form of digital money Reports from victims of large financial Cryptocurrency accounted for the second Cryptocurrency has some key traits that Many victims report that after purchasing A consumer told BBB that she began BBB Scam Tracker data shows that Cryptocurrency figures prominently in Law enforcement agencies have pursued Where to report a scam or register a complaint:\u00a0<\/p>\n
\n scams: BBB study finds lack of regulation and consumer education
\nresults in dramatic increase in fraud and financial losses
\n \u2013 examines the many facets of cryptocurrency and the variety of ways
\ncriminals are exploiting the cryptocurrency market to steal from
\ninvestors and victims of common scams. Read the full study<\/a>.\u00a0<\/p>\n
\nwhereby encryption technology can enable anyone anywhere to send and
\nreceive payments. It does not exist in a physical form such as paper
\nmoney, but as lines of computer code, supported by a decentralized
\ncomputer system known as blockchain and stored in a \u201ccrypto wallet.\u201d
\nBitcoin, developed in 2009, is the most popular form of cryptocurrency,
\navailable for purchase at tens of thousands of Bitcoin ATMs and
\nincreasingly accepted as payment in certain retail transactions.
\nEthereum is the second most common cryptocurrency and is centrally
\ninvolved in the increasingly popular non-fungible tokens (NFTs), digital
\n assets such as pictures or music that are purchased with cryptocurrency
\n as an investment. Critically, cryptocurrency operates outside the
\ntraditional banking system and is not subject to the same protections as
\n bank deposits or credit card transactions.\u00a0<\/p>\n
\nlosses to cryptocurrency related scams are skyrocketing. In 2021, BBB
\nreceived more than 2,400 complaints with monetary losses of nearly $8
\nmillion involving cryptocurrency companies. BBB Scam Tracker reports
\nabout crypto scams numbered more than 1,200 in 2021 and likewise totaled
\n nearly $8 million in losses. Scam Tracker reports to BBB tripled between 2019 and 2021, and reported losses tripled over the last two years.\u00a0<\/p>\n
\nhighest scam losses reported to the Federal Trade Commission (FTC) in
\n2021, with losses of $750 million. The FBI\u2019s Internet Crime Complaint
\nCenter (IC3) and the Canadian Anti-Fraud Centre (CAFC) also had major
\nincreases in reports received and major increases in losses. BBB\u2019s study
\n notes that research shows that most people do not make a report when
\nthey are scammed, so actual losses suggested to be substantially
\ngreater.\u00a0<\/p>\n
\nmake it attractive to scammers: It is relatively unregulated and
\ndifficult to recoup once lost; it is wildly popular, fueled in part by
\ncelebrity endorsements; and it is not well understood by the general
\npublic. The study states that the cryptocurrency market offers new
\nopportunities for tried-and-true investment frauds such as Ponzi schemes
\n and fraudulent ICOs (initial coin offerings), particularly given the
\ndevelopment of new currencies and the lack of protections that
\ngovernment regulation has made available to more traditional investors.\u00a0\u00a0<\/p>\n
\ncryptocurrency, they\u00a0were directed to websites where they had to create
\nan account in order to monitor their investments. The websites are
\nsophisticated, with many offering live customer service chats. But
\nvictims who want to withdraw their \u201cearnings\u201d are told they must
\ncontribute more money to cover taxes, commissions, or other fees.
\nUltimately, they can never withdraw money..\u00a0<\/p>\n
\nlearning about Bitcoin investing in the summer of 2021, reaching out via
\n WhatsApp to an investing service she saw mentioned repeatedly in the
\ncomments of a YouTube video about Bitcoin. The woman was instructed to
\nbuy $1,500 in Bitcoin via CashApp; 10 days later, she received a
\nscreenshot displaying an account balance of more than $7,300. However,
\nwhen she decided to withdraw her earnings, she was told to pay a 10%
\ncommission and a broker\u2019s fee of more than $800. After she paid both,
\nshe received an email instructing her to pay an additional sum of nearly
\n $1,200 to withdraw her money. She concluded it was a scam and reported
\nit to BBB.\u00a0<\/p>\n
\ncryptocurrency scams most commonly originate on social media, with the
\nFTC noting that 25% of crypto fraud reported in 2021 began on social
\nmedia. Scammers may impersonate a victim\u2019s friends to tell them about
\ntheir success in crypto investing, or they may make Facebook posts
\npromising big gains.\u00a0<\/p>\n
\nother scams as well. Law enforcement and BBB report that romance
\nscammers have begun convincing their victims to invest in cryptocurrency
\n via sophisticated fake apps, disappearing with the money when the
\nvictim attempts to withdraw proceeds. Ransomware scams also demand
\ncryptocurrency as payment in many cases, BBB\u2019s study notes. BBB Scam
\nTracker data shows that cryptocurrency also is a commonly requested
\npayment method in fraudulent online sales, advance fee loan scams,
\nemployment scams, extortion scams, government impostor fees and more.
\nIllicit transactions on the so-called dark web are often conducted using
\n cryptocurrency, and it is used in money laundering.\u00a0<\/p>\n
\ncases involving large cryptocurrency losses and the use of
\ncryptocurrency in criminal activity. The U.S. Department of Justice has
\nmade arrests this year in cases involving billions of dollars in
\ncryptocurrency laundering.\u00a0\u00a0<\/p>\nTips to avoid cryptocurrency scams: <\/h2>\n
\n
\n If you buy cryptocurrency, the security of the wallet is of prime
\nimportance. If you lose the key, then your funds are gone permanently.\u00a0\u00a0<\/li>\n
\n scams often try to trick people into logging in and then capture the
\nlog in credentials. Those then can be used to steal money. Looking for
\nan exchange with an internet search engine may lead to fake sites which
\nadvertise and impersonate real companies. Be especially careful when
\nviewing these on a phone.\u00a0<\/li>\n
\n Be careful if someone asks you to pay with Bitcoin or another
\ncryptocurrency. No one with the government will ever ask for this form
\nof payment.\u00a0<\/li>\n
\n It can be tempting to rely on a prominent figure who has invested in
\ncryptocurrency. But those endorsements are often not authorized and even
\n if they are, the celebrity may be paid for the effort and may not know
\nmore about it than you do.\u00a0<\/li>\n
\n app stores do not eliminate the threat of app scams, but they do offer a
\n basic level of protection. Be careful with apps. Some contain malicious
\n software.\u00a0<\/li>\nRecommendations for industry and regulators: <\/h2>\n
\n
\nPrevent hijacking of profiles\u00a0Stop scam advertisements for cryptocurrency investment schemes\u00a0\u00a0Prevent the illegal use of celebrity names to promote cryptocurrency scams\u00a0\n<\/li>\n\n
\nAll transaction IDs\u00a0\u00a0Where you sent your crypto from (private wallet, account at exchange X, etc.)Where you believed you were sending your funds (perpetrator\u2019s private wallet, arbitrage account, etc.)\u00a0Any details regarding the scam and scammers.\n<\/li>\n