Cryptocurrency Scams to Avoid
While cryptocurrency continues to rise in popularity, it’s crucial for you to be aware of these scam tactics and know how to keep yourself and your money safe.
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 many advantages to cryptocurrency, there are also disadvantages. As cryptocurrency becomes more popular, scammers are also taking advantage of its popularity.
If you’re going to invest in cryptocurrency, avoid these scams and learn how you can protect yourself.
1. Romance Scams
The scheme: 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.
How to protect yourself: Never mix online dating and investment advice. Do not feel pressured to buy or give money for a new cryptocurrency to a stranger, regardless of how close you feel.
2. Social Media-”Big Promises”
The scheme: 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. If someone is guaranteeing profits or promising big returns, it’s a scam. Usually scammers suggest a job opportunity and send you a large amount of money. The scammer will ask you to withdraw the cash and use it to purchase Bitcoin or cryptocurrency 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 scammer reverses the payment, which leaves you with a negative balance and no Bitcoins.
How to protect yourself: Legitimate cryptocurrency investments never guarantee you will make money. Avoid buying cryptocurrency from individuals as it is likely a scam.
3. Cheap Listings
The scheme: 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 your 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.
How you can protect yourself: If you see a cheap listing you don’t want to pass up, remember, a credible person usually does not accept crypto-only payments.
4. Pretending to be a Legitimate Entity
The scheme: Scammers impersonating businesses or a government official normally start with a text, asking you about a so-called unauthorized purchase. These “purchases” are from common sites such as Amazon. Scammers will claim you’re a victim of fraud and that your money's at risk. Scammers will 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.
How you can protect yourself: If anyone claiming to be from the government or your bank contacts you and tells you to purchase Bitcoin, do not interact with them and end the communication immediately.
Remember, as your bank, we will never ask for your personal information. If something feels wrong, trust your instincts and contact us immediately. It is easiest to protect yourself from cryptocurrency scams by staying educated about the scams that happen to regular people and what you can do to avoid them.
