As public interest in cryptocurrency investing has soared so have cryptocurrency scams and bitcoin fraud.
Scammers are always looking for new ways to steal your money. With cryptocurrency accelerating in popularity, new scamming opportunities have been created.
The scammers have begun impersonating businesses, government agencies, and love interests, among other tactics to trick you into buying cryptocurrency and transferring it to them.
Although crypto cons are a relatively new concern, the tactics used by the fraudsters remain the same. Only now they involve either investment or payment through cryptocurrency.
Is investing in cryptocurrency safe?
Crypto is central to an investment scam as it can be used in one of two ways, either as the investment opportunity or as the form of payment.
Investment scams often begin with an unexpected text, email or phone call. However, more than likely they will commence through social media or an online dating website/ app.
Generally an “investment manager” or enthusiast will reach out to you unexpectedly via one of the previously mentioned forums, guaranteeing big returns with zero risk.
The investment scammer may even steer you towards a legitimate looking website, containing celebrity endorsements and testimonials from happy investors. Although it may all look genuine, these elements are easily faked.
Spotting an Investment Cryptocurrency Scam
It is important to note that no financial investment is guaranteed to return a profit, as investments can decrease as well as increase. Therefore, promising a quick and easy way to turn a profit is a major red flag.
Any investment opportunity offering free money is always a sign of a scam, whether in cash or cryptocurrency.
Scammers tend to make big claims without any detail or further explanation. Honest investment advisors want to share information with you and provide further details.
Never mix online dating and investment advice. If you meet someone on a dating site or app, and they offer you investment advice or want to show you how to invest in crypto, this is more than likely a scam.
It is essential to conduct your own research into an investment opportunity, to find out how it works and to ask questions.
Finally, as with any investment opportunity, never invest money you cannot afford to lose. It is essential to understand the risks associated with crypto before you invest.
Business and Government Impersonators Scams
Scammers often impersonate well-known companies pretending to be someone you trust in order to convince you to buy and send them cryptocurrency.
They may text, call, email or send messages through social media. You may be told there has been fraudulent activity on your account, you owe money, your money is at risk or that your account have been frozen due to suspected illegal activity.
In order to rectify the issue or to protect your money you will need to purchase crypto and send it to them for “safekeeping”.
Some scammers may even stay in contact with you, giving you step-by-step instructions on how to convert your money to cryptocurrency and how to send the payment directly into their digital wallet.
How to avoid a business or government impersonator scam
No legitimate business is going to demand payment in cryptocurrency. If a payment can only be made through crypto, this is a scam.
Equally no legitimate business will ever email, text, or message you on social media to ask for money.
Never click on a link from an unexpected text, email, or social media message, even if it seems to come from a company you know.
Unlike many other forms of payment, cryptocurrency payments do not come with any legal protections. Once the crypto is transferred, your money will be irretrievable and the scammer will disappear. Therefore you should never pay anyone who contacts you unexpectedly, demanding payment through cryptocurrency.