Fraudsters exploit cryptocurrency scams to deceive you into losing money. They may impersonate trustworthy individuals or businesses, asking for cryptocurrency as payment or investment in a supposedly exclusive opportunity. Educate yourself about cryptocurrency scams to protect your money and personal information.
What you need to know
Be cautious with any person or company that exclusively accepts cryptocurrency for payment. Always safeguard your personal and banking information as well as your digital wallet—never share these details with others. Avoid feeling pressured to invest quickly; take time to research and verify the legitimacy of any investment opportunity. Explore your options and ask questions before proceeding.
What’s a cryptocurrency scam?
There are numerous cryptocurrencies available, including well-known ones like Bitcoin and Ethereum, as well as new ones being continuously developed. Fraudsters employ various scams to lure you into buying and sending cryptocurrency, either as payment or for dubious investment opportunities.
Common cryptocurrency scams
Crypto-only Payments:
A seemingly legitimate person or business may insist on receiving payments exclusively in cryptocurrency, claiming they don’t accept traditional payment methods like credit or debit cards. Fraudsters prefer cryptocurrency transactions because they are harder to trace.
Investment Schemes:
Fraudsters entice you with fraudulent cryptocurrency investment opportunities, presenting them as once-in-a-lifetime chances, time-limited deals, or guaranteed high returns with no risk. They may convince you that your investment is performing well, but you’ll ultimately never see your money again.
Phishing:
Fraudsters use phishing tactics to obtain your digital wallet’s private key and steal your cryptocurrencies. They often send mass emails with malicious links, hoping you’ll click on them and inadvertently reveal your personal and banking information.
How paying with cryptocurrency differs from traditional methods
Cryptocurrency is kept in a digital wallet, which can be online, on a computer, or on an external hard drive. These wallets are not insured by the government, making it challenging to recover funds if your wallet is stolen, compromised, or if you send cryptocurrency to a scammer. Unlike traditional methods, cryptocurrency transactions don’t require intermediaries like banks, and they can offer anonymity to the recipient, making it difficult to trace and recover your money. Additionally, cryptocurrency values fluctuate frequently, so there is no guarantee of its worth.
Warning signs of cryptocurrency scams
Promises of Free Money: Offers of money with no cost or effort on your part.
Unclear Investment Details: Lack of specific information about how your investment funds will be used.
Unsolicited Offers: An unknown individual presents a cryptocurrency investment opportunity that seems too good to be true.
No Risk Claims: Assurance that a cryptocurrency investment involves no risk and guarantees high returns.
Celebrity Endorsements: Promotions of cryptocurrency investments by celebrities or social media influencers.
Poor Communication Quality: Presence of misspelled words and grammatical errors in unsolicited emails or social media messages.
