Attention consumers: with bitcoin trading solidly above $90,000 this month and closing in on the $100,000 level, cybercriminals will be circling the wagons.
“This is going to create a lot of FOMO and a lot of urgency around investing in Bitcoin and paying with Bitcoin,” said Eva Velasquez, president and CEO of the Identity Theft Resource Center. Scammers “love, love, love to take advantage of external events, create confusion, create that sense of urgency and steal your hard-earned money.”
The problem is compounded by the fact that legitimate strategies for making money with Bitcoin are being discussed publicly by reputable sources. This, coupled with advances in AI technology, makes scams more real for even the most savvy investors, industry professionals said.
The stakes are especially high given that the Federal Bureau of Investigation’s Internet Crime Complaint Center received more than 69,000 complaints related to cryptocurrency fraud last year, with losses estimated at more than $5.6 billion . Losses associated with these complaints accounted for almost half of the total fraud losses reported.
With that in mind, here’s how to recognize and avoid the latest crypto scams:
“Elon Musk is not going to double your money”
The most common scams today include fake bonuses in exchange for an initial investment, fake coin promotions, phishing emails or text messages that appear to come from reputable crypto companies or exchanges, Ponzi and pyramid schemes, or “pig butchery” scams that involve fraudsters building trust over time. , often posing as friends or romantic partners, before convincing victims to invest in fake crypto platforms.
The programs also commonly bring up well-known names like crypto enthusiast and Tesla CEO Elon Musk. Scammers distributed fake videos of Elon Musk, including fake live broadcasts, making it appear as if he was talking about specific cryptocurrency opportunities. In one such scam, thieves attempted to trick investors into scanning a QR code before the livestream ended. Investors were promised double the amount of cryptocurrency they deposited, according to a report from Engadget.
“Elon Musk won’t double your money if you send him cryptocurrencies,” said Merrick Theobald, vice president of marketing at BitPay, a cryptocurrency payment service.
These types of scams are likely to proliferate with Musk, still making headlines, appearing even more prominently in President-elect Trump’s orbit and chosen to co-lead the proposed Department of Government Effectiveness. The Trump administration is also expected to serve as a driving force for crypto, with pro-crypto legislation expected to be one of the first legislative efforts passed by a new Congress.
Coinbase Warns Scammers Will Prey on Your Fear
Scammers also use fear to trap their victims.
Coinbase We are seeing several scams where cyber thieves send a text message claiming that a crypto owner’s account has been compromised. If the user responds to the text, the fraudsters attempt to obtain additional information such as the crypto owner’s seed phrase, which allows the thieves to drain the account, said Jeff Lunglhofer, chief information security officer from Coinbase. People fall for this because everything seems plausible and the scammers convince them their assets are at risk, he added.
If you receive a text message or email claiming there is a problem with your crypto account, do not respond or click on any links. Instead, go directly to your provider’s website or call the phone number you know is associated with the provider to inquire about your account, Theobald said.
Be wary of one-off promotional offers
Fraudsters sometimes send emails or place advertisements on social media, offering one-time promotions for investing in crypto. These ads often look like legitimate offers from reputable companies that people know or have done business with in the past, said Howard Greenberg, president of the American Blockchain and Cryptocurrency Association, a nonprofit trade association. .
But there may be a letter missing from the URL and if you click on it, you’ll see something that looks a lot like the reputable site’s home page, making people even more confused, Greenberg said. In reality, crypto owners log their credentials into a scam site. “Before you realize you’ve logged into a fake site, your money is gone,” Greenberg said. “There is no way to resolve a dispute like you can with a credit card.”
To avoid this problem, it recommends users to bookmark the websites of legitimate providers they use. This way, investors can go directly there to buy cryptocurrencies and don’t accidentally fall for a scam by clicking on someone else’s link. Additionally, it recommends that people only buy cryptocurrencies on reputable exchanges, including Coinbase and Gemini. “You don’t want to use a clandestine exchange from Liechtenstein,” Greenberg said.
How families are defrauded
There’s the adage, “If it sounds too good to be true, it probably is,” but when it comes to crypto scams, people always take the bait. Sometimes it’s because they don’t recognize the warning signs. These include offers that seem too good to be true, pressure tactics, or unrealistic performance promises. A little work can save a lot of money and headaches, industry professionals say.
Yaya Fanusie, director of anti-money laundering and cyber risk policy at the Crypto Council for Innovation, recently had a family member scammed by a crypto scammer. The company, allegedly founded by a renowned mathematician, advertised a guaranteed return on investment of 150%. Fanusie did some research on the relative’s behalf and discovered that the supposedly famous mathematician only had a few dozen followers on LinkedIn. Fanusie was also wary because of the high investment guarantee and the fact that his loved one was asked to communicate with the company on WhatsApp, which is end-to-end encrypted and offers additional protection to fraudsters.
Another red flag is if an organization asking for money claims crypto is the only payment option, Velasquez said. “I would be very wary of any transaction where the only way to pay is by cryptocurrency.”
Conduct detailed research on new cryptocurrency tokens and companies
Fanusie recommends that potential investors search the Internet for information about any company they are considering doing business with, including where it was registered and when it was registered. He also urges potential investors to check the Fincen website to determine whether the provider they are considering is regulated as a money services business. If a company claims to be an investment company, it’s worth checking with the SEC to see if it’s registered, he said.
“You can’t believe what they say,” he said.
Potential investors should also take the time to ensure that any digital coin they are considering purchasing is legitimate. If the token is not listed on a mainstream site, it may not be legitimate or may be obscure and therefore riskier. One way to check the legitimacy of a token is to research it on price tracking sites such as CoinGecko or CoinMarketCap.
“A lot of times if you do a little bit of checking… you find out that things aren’t always what they seem,” Fanusie said.
