You could be a victim of Cryptocurrency fraud – even if you’ve never dreamed of investing in it.

The hallmark of a good scammer is the ability to convince you to do something you never thought you’d do. These bad actors lean on the power of emotion and classic sales tactics to convince you that whatever action they want you to take is the right course of action for you.

In this case, that transferring a large part – if not all – of your hard-earned savings into crypto is your best move.

Why Cryptocurrency Appeals to Scammers

Anonymity is key for criminals and Cryptocurrency allows this more than anything else. All one needs to transfer funds into crypto is a wallet ID, which acts loosely like a bank account. Once your money has been deposited into a digital crypto wallet, they can be transferred to multiple wallet IDs in just seconds. Not only does this obscure the trail of the bad actor, it makes it almost impossible to recover your funds once you realize it was a scam.

With very little-to-no wait time to access the funds and the difficulty to trace and recover, it’s no wonder that scammers are exploiting Cryptocurrency at alarming rates. International criminal organizations have begun relying on Cryptocurrency investment scams to fund their operations. These scams may combine with other forms like romance scams, tech support scams, or inheritance scams to maximize their gains.

How Do Cryptocurrency Scams Work

It’s important to remember that these bad actors are trained to play on your emotions. They are exceedingly good at what they do – convincing you to do things you typically wouldn’t. They rely on tactics like urgency and fear to force you into hasty decisions.

1 | Investment Scams

You may receive an online unsolicited message that seems innocuous at first. The message may be “mistakenly” sent to you while being intended for someone else. Unfortunately, the message was always intended for you and is a trick designed to lower your suspicions. The conversations may grow and become more personal, often flirtatious. After a short while, they will begin mentioning an investment opportunity with high returns in such a short period of time that involves Cryptocurrency. Fraudsters know that most people aren’t clear on how Cryptocurrency works. This is their golden opportunity to exploit your lack of understanding.

Fraudsters will help guide you through the process of investing with Cryptocurrency by having you download either a legitimate app or a fraudulent one (or both). They will help you create an account and may even promise to invest with you to help build that trust and ease fears. You may see a quick gain after investing, which is manipulated by fraudsters behind the scenes. They will encourage you to withdraw the funds to further let your guard down and trust this is not a scam. However, they will soon push for you to invest more so you could quickly make more, but you may now be limited or restricted from withdrawing additional gains. Depending on the scammer will determine the reasoning, but they all operate the same. They will request fees need to be paid while promising everything is okay. Their goal is for you to invest all your funds and savings into Cryptocurrency before they drain it all and leave you with empty pockets.

2 | Law Enforcement/Tech Support Scam

Scammers also pose as FBI or local law enforcement agents demanding payment to clear your name on false charges. You may receive an alert to contact a Microsoft or Apple agent and think your computer was compromised. They may request you send funds to them via Cryptocurrency to temporarily keep it safe until your computer is “fixed.” Cryptocurrency kiosks are popping up around the country and are designed to let people convert cash into crypto. Scammers will request victims to withdraw large sums of cash from their financial institution and bring to these kiosks to be deposited into the scammer’s wallet ID. Once the funds go into the machine and the transaction is complete, there is little hope of seeing that money back. 

3 | Security Scam

You may even receive a call or text from someone posing to be from HFCU. They’ll urge you to move your money out of your accounts and into Cryptocurrency to save it from potential security risks. Pretending to be acting in your best interest, the fraudster will helpfully walk you through the process of transferring funds into crypto, ensuring you that doing so will keep your money safe. As in the previous cases, though, once your money is transferred into their wallet ID, the bad actors cease contact and walk away with your money.

In all these scenarios, the bad actors will manipulate your emotions. In the first scenario, they’ll play on the human desire for fast returns, knowing how tight money is for many people right now. In the last two, they will turn up the fear and helplessness, positioning themselves as the “good knight” who will protect you.

Protect Yourself From Cryptocurrency Scams

The most important step to take is to stop. Before you act, consider the situation and whether it really seems legitimate or if your emotions are being manipulated to force you into rash decisions.

  • No legitimate company (i.e. Microsoft, Apple, Comcast, Amazon, FedEx, Norton) or organization (i.e. IRS, FBI, Social Security Administration, law enforcement) will request for you to pay in Cryptocurrency, gift cards, wires, CashApp, Venmo, PayPal, or other unusual forms of payment. If you receive a phone call or message from someone claiming to be a tech support agent, company representative, or government agent/officer requesting payment, immediately end the conversation and do not further engage.
  • Do not provide financial or personal information to someone you have met online that may be requesting it, especially if they are trying to be romantic.
  • Do not join in an investment opportunity with someone you have only met online.
  • Do not respond to unsolicited online messages.
  • Cryptocurrency and investment mentioned together? It’s a scam.
  • Be cautious of friends you know trying to recruit you into a Cryptocurrency investment opportunity as they may have fallen victim to a scam.

As always, you can always reach out to us to verify the legitimacy of a request. If you believe you’ve been the victim of any type of fraud, contact us right away. And check out additional fraud tips here.