By John North
Better Business Bureau
Cryptocurrency is a digital currency that generally exists only electronically. It’s stored in a digital wallet, which can be online, on your computer or on an external hard drive. Bitcoin and Ethereum are well-known cryptocurrencies, but there are many different types and new ones keep being created. People use cryptocurrency for many reasons — quick payments, to avoid transaction fees that traditional banks charge or because it offers some anonymity. Others hold cryptocurrency as an investment, hoping the value goes up. However, cryptocurrency can be problematic because the accounts aren’t insured by the government and its value changes constantly. It’s often used in association with fraudulent sales online, romance scams, extortion scams, imposter scams, employment scams and many more.
Cryptocurrency scams are some of the riskiest scams and they are on the rise. According to the Better Business Bureau Scam Tracker, 80% of Americans targeted by crypto and investment scams lost money in 2023. The median amount lost was $3,800, but many people lost more. The BBB offers these tips for protecting yourself against cryptocurrency scams.
Do your research. Look into the companies you’re interested in investing in.
Keep track of your wallet security. Don’t lose the key to your wallet or your funds will be gone permanently.
Double check email and website addresses. Phishing scams often try to trick people into logging in and then taking their login credentials.
Don’t make payments with cryptocurrency. Legitimate businesses won’t demand you send them cryptocurrency in advance for payments or to protect your money.
Beware of fake recovery companies. Scam companies sometimes claim they can recover stolen money.
Watch out for fake reviews. Scammers sometimes create fake reviews for their companies.
Be wary of celebrity endorsements. They are often fake or the celebrity has been paid for their support.
Watch out for high pressure sales tactics involving cryptocurrency.
Don’t mix social media “friends” and cryptocurrency. If people are reaching out over social media to tell you about cryptocurrency, their account has probably been compromised. Call your friend to see if he or she actually reached out.
Only download apps on the App Store or Google Play. Trusted app stores have an added level of protection against scammers, but doesn’t eliminate the chance entirely.
Don’t believe promises of guaranteed returns and big profits.
If you fall victim to a cryptocurrency scam, report it to the Federal Trade Commission (www.ReportFraud.ftc.gov), Commodity Futures Trading Commission (www.CFTC.gov/complaint), US Securities and Exchange Commission (www.sec.gov/tcr) and the Internet Crime Complaint Center (www.ic3.gov/Home/FileComplaint). You can also report it to BBB Scam Tracker at www.BBB.org/ScamTracker.
