The roller-coaster ride for digital currency investors has been wild, with news reports of both cryptocurrency millionaires and dramatic failures, including the 2022 collapse of the crypto exchange FTX. It is possible to make money through cryptocurrencies — which include bitcoin, ethereum, cardano and many more. The problem: Some cryptocurrency investments are phonier than $3 bills. And people who invest their hard-earned dollars in these schemes are often left empty-handed.
Cryptocurrency fraud has taken a quantum leap in the past year, with the Federal Trade Commission (FTC) recently warning consumers that “crypto investing comes with lots of risks, including scams.” Nearly 53,000 people reported losing more than $1.4 billion in crypto to scams in 2022.
Here are 10 things to know about cryptocurrency and related scams.
1. Some crypto criminals will impersonate celebrities. Con artists posing online as billionaires or other big names promise to multiply your investment in crypto but instead pocket what you send. They also might plant rumors that a certain bigwig is investing in a certain currency, in order to drive up the price. Then they’ll sell for a profit.
2. Others pretend to be from government agencies. Many victims reported loading cash into a bitcoin ATM (a kiosk lets you buy and sometimes also sell bitcoin) to pay crooks claiming to be from the Social Security Administration. Its Office of Inspector General recently issued a warning about these government impostor scams.
3. Fraud perpetrators often find victims through social media. They may begin with offers of investment tips or secrets on Facebook, LinkedIn or online message boards that lead people to bogus websites touting what appear to be chances to invest in popular cryptocurrencies.