That, in turn, has led to a revival of cryptocurrency scams. During two weeks in March Bitcoin’s value rose nearly 34%. Scam operators have stepped up their efforts to lure potential victims who hope to cash in.
The Federal Trade Commission (FTC) warns that the criminals behind crypto scams usually promise you can “make lots of money” with “zero risk.” A sophisticated investor knows investments never fall into that category.
Lately, these scams have begun on dating apps. The scammer establishes a romantic relationship with his victim before offering to let them in on the “can’t miss” investments. The FTC says that in these scams, crypto is central in two ways: it can be both the investment and the payment.
Here’s how it plays out
According to the FTC, here are some of the way crypto scams can unfold:
You get a call, out of the blue, from someone claiming to be an “investment adviser. They promise to grow your money — but only if you buy a cryptocurrency and transfer it into their online account. The investment website may appear legit but it’s fake. Your money is gone.
The scammer might pose as a celebrity who contacts you through social media with a “great opportunity.” But wait a minute – why would a celebrity contact you? If you click on an unexpected link they send or send cryptocurrency to a so-called celebrity’s QR code, that money will go straight to a scammer and it’ll be gone.
Scammers might guarantee that you’ll make money or promise big payouts with guaranteed returns. Again, remember that no investments offer a no risk, guaranteed return. The closest thing there is to that is a Treasury bond or CD. And there’s nothing “low risk” about cryptocurrency investments. So if a company or person promises you’ll make a profit, that’s a scam.
Scammers promise free money. They’ll promise free cash or cryptocurrency, but free money promises are always fake, the FTC says.
Scammers make big claims without details or explanations. No matter what the investment, find out how it works and ask questions about where your money is going. Honest investment managers or advisors want to share that information and will back it up with details.
The FTC suggests that before you make any investment in crypto, search online for the name of the company or person and the cryptocurrency name, plus words like “review,” “scam,” or “complaint.” See what others are saying.