Many people invest in cryptocurrency or use it as a medium of exchange, as it offers portability, divisibility, inflation resistance, and transparency. Although there are advantages to cryptocurrency, there are also disadvantages. As cryptocurrency becomes more popular, so do scams.
If you’re going to invest in cryptocurrency, avoid these scams and learn how you can protect yourself.
1. Social Media “Get Rich Quick” Scam
You may receive messages or see posts on social media platforms about “getting rich” quickly. You may also see these “opportunities” via email or text. Only scammers guarantee profits or big returns. Normally, scammers suggest a job opportunity and victims are e-transferred a large amount of money. The scammer will ask you to withdraw the cash and use it to purchase Bitcoin as part of an employment application process. A few days later, the money is sent via the e-transfer and is linked to a stolen bank account. Then, the payment is reversed, which results in you having a negative balance and no Bitcoins. Legitimate cryptocurrency investments never guarantee that you will make money. Avoid buying cryptocurrency from individuals - it is likely a scam.
2. Dating Apps
Often, cryptocurrency scams take place on dating apps. This happens when an individual pressures and convinces you to buy or give money for a new cryptocurrency. It is common for dating app users to experience crypto scams since it’s easy to feel like a new connection you formed with someone is trustworthy. Never mix online dating and investment advice.
3. Put Your Money in Crypto to “Protect” it
Scammers impersonating businesses or a government official usually start with a text, asking you about a so-called unauthorized purchase. Scammers will claim you’re a victim of fraud and that your money's at risk. Scammers will even go to the extent of impersonating your bank by telling you they’re freezing your account. This is when the scam happens: victims are told the only way to protect their money is to put it in cryptocurrency. This requires you to go to a crypto ATM and hold up a QR code to the ATM’s camera. The QR code is normally embedded with the scammer’s wallet address which results in the victim's money being stolen. If anyone claiming to be from the government or your bank contacts you and tells you to purchase Bitcoin or any other cryptocurrency, do not interact with them.
4. Cheap Offerings
Large purchases such as a car are often listed for an unbelievably cheap price on a classified advertisements website, such as Craigslist or eBay. After the cheap listing catches the victim’s attention, the scammer will ask you to make a Bitcoin payment to the QR code they provide. Often, the scammer will ask you to use a Bitcoin ATM as a medium to make the payment. After the bitcoins are sent, the seller disappears which leaves you without funds, since Bitcoin payments are not reversible. If you see a cheap listing you don’t want to pass up, remember, a credible person normally does not accept crypto-only payments.
The easiest way to protect yourself from cryptocurrency scams is to stay educated about the scams happening to regular people, and what you can do to protect yourself. Remember, as your bank, we will never ask for your personal information . If something feels wrong, trust your instincts and contact us immediately.