The Federal Bureau of Investigation (FBI) has issued a warning about the rise in crypto scams involving Tether (USDT) and USD Coin (USDC). As cryptocurrencies become more widely used, the number of people falling victim to these scams is on the rise, resulting in significant financial losses. Scammers are targeting mature adults through social media platforms, dating apps, and discussion forums, luring them into fictitious investment accounts where the fraudsters disappear with their funds. The FBI urges individuals to be cautious and aware of the warning signs to avoid becoming victims of these increasingly common crypto scams.
Overview of Crypto Scams on the Rise
The Denver Division of the Federal Bureau of Investigation (FBI) has recently issued a warning about the increasing number of cryptocurrency scams. As cryptocurrencies become more common, more and more people are falling victim to these scams, resulting in significant financial losses. Of particular concern is the targeting of mature adults in crypto investment scams, with Tether (USDT) and USD Coin (USDC) being the most commonly involved cryptocurrencies. In a typical scenario, victims are approached on social media platforms, dating apps, or discussion forums with enticing investment opportunities. They are then directed to set up an investment account through a link or phone number provided by the fraudsters. However, these links or phone numbers are controlled by the scammers, who have set up fictitious support sites. Once the victims transfer their funds, the fraudsters disappear, leaving them with substantial losses.
Statistics on Crypto Fraud Losses
According to the Federal Trade Commission (FTC), investment scams account for the majority of reported crypto fraud losses. Since 2021, $575 million of all reported crypto fraud losses that began on social media were related to bogus investment opportunities, making it the most prevalent type of fraud in the crypto space. In total, over 46,000 people have reported losing more than $1 billion to crypto scams. The losses reported in 2021 were nearly 60 times higher than those reported in 2018. In Colorado alone, victims have reported losing almost $25 million to investment scams in 2021, according to the FBI’s Internet Crime Complaint Center (IC3). Of all age groups, mature adults aged 60 and older have been the hardest hit by these scams.
Examples of Recent Cryptocurrency Investment Fraud Victims in Colorado
Unfortunately, there have been numerous victims of cryptocurrency investment fraud in Colorado. Here are some recent examples:
- A 52-year-old man from Aurora lost approximately $600,000 in a Tether investment fraud scheme.
- A 61-year-old woman from Denver lost approximately $1.3 million in a Tether investment fraud scheme.
- A 62-year-old man from Evergreen lost approximately $350,000 in a Tether investment fraud scheme.
- A couple in their late 40s from Parker lost approximately $1.2 million in a Tether investment fraud scheme.
- A 53-year-old man from Timnath lost approximately $600,000 in a USD Coin investment fraud scheme.
These examples highlight the devastating financial impact that crypto scams can have on individuals and families.
Warning Signs and Common Tactics Used by Crypto Scammers
Crypto scammers employ various tactics to lure in unsuspecting victims. Here are some common warning signs and tactics used by these fraudsters:
- Promising high returns and minimal risk: Scammers often guarantee significant profits and claim that investments are low risk. However, legitimate investments always come with a level of risk, and no one can guarantee high returns.
- Starting scams on social media or dating apps: Cryptocurrency investment scams often begin with an unexpected text, email, or call on social media platforms or dating apps. Fraudsters exploit these platforms to reach a wide audience.
- Using cryptocurrencies as both the investment and payment: Crypto scammers utilize cryptocurrencies as the investment itself and as the preferred method of payment. This can make it difficult for victims to recover their funds once they realize they’ve been scammed.
Major Cons in Cryptocurrency Investment Fraud
Two major types of cryptocurrency investment fraud have been identified by the FBI:
- Fake investment managers promising high returns: Scammers posing as investment managers reach out to victims and promise exponential growth in their investments. They often require victims to buy cryptocurrencies and transfer them to an online account. However, these investment websites are fake, and victims are unable to withdraw their money or are charged exorbitant fees to do so.
- Online scams involving love interests and crypto investments: Scammers may pose as love interests on dating websites or apps and then convince victims to invest in cryptocurrencies under the pretense of helping them grow their assets. Once victims send their money or crypto, the scammers disappear, leaving them with significant losses.
Tips to Protect Yourself Against Cryptocurrency Investment Fraud
To safeguard yourself against cryptocurrency investment fraud, follow these tips:
- Beware of guarantees and get-rich-quick schemes: Be skeptical of any investment opportunity that promises guaranteed profits or sounds too good to be true. Legitimate investments involve risks, and high returns often come with high risks.
- Ask for details and do thorough research before investing: Gather as much information as possible about the investment and the individuals or companies involved. Conduct independent research to validate the information provided.
- Navigate to websites independently and avoid provided links: Instead of clicking on links provided by potential scammers, manually enter the website address into your browser or conduct a search using reputable search engines.
- Use legitimate app stores to download apps: If you come across a new app related to cryptocurrency investments, download it directly from trusted app stores instead of following links provided by unknown sources.
- Verify the legitimacy of investment advisors: If you are approached by an investment advisor, verify their credentials and check if they have a legitimate business email account. Be cautious of advisors who pressure you into making hasty decisions.
- Avoid making hasty decisions and pressure from advisors: Take your time to evaluate investment opportunities and consult with trusted financial professionals before making any decisions. Do not succumb to pressure tactics employed by scammers.
Actions to Take If You Are a Victim of Crypto Investment Fraud
If you believe you have fallen victim to cryptocurrency investment fraud, take the following actions:
- File a complaint with the FBI’s Internet Crime Complaint Center (IC3): Visit the IC3 website at www.ic3.gov to report the fraud and provide details about the incident.
- Report the fraud to the exchange company used for the transaction: If you made the payment using a cryptocurrency exchange, contact the exchange company and inform them about the fraudulent transaction.
- Keep all original documentation and communication records: Preserve all emails, faxes, transaction receipts, and any other communication records related to the scam. These can be valuable evidence if you need to pursue legal action.
Additional Attempts and Information for Victims of Crypto Investment Fraud
It’s important to be aware that scammers may attempt to contact you again even after you’ve fallen victim to crypto investment fraud. They may share or sell your information to other scamming networks, leading to further contact attempts. It is vital to remain vigilant and report any subsequent fraudulent activities to the appropriate authorities promptly.
For more information on crypto scams and how to protect yourself, you can visit the following resources:
- FBI’s Internet Crime Complaint Center (IC3) website at www.ic3.gov
- Federal Trade Commission (FTC) website with articles on cryptocurrency and scams at https://www.consumer.ftc.gov/articles/what-know-about-cryptocurrency-and-scams
- FTC’s Data Spotlight on reports of scammers cashing in on the crypto craze at https://www.ftc.gov/news-events/data-visualizations/data-spotlight/2022/06/reports-show-scammers-cashing-crypto-craze
Importance of Awareness and Vigilance Against Crypto Scams
As the use of cryptocurrencies continues to grow, so does the prevalence of crypto scams. The FBI stresses the importance of being aware of the warning signs and tactics used by scammers to avoid falling victim to these fraudulent schemes. By staying informed and vigilant, individuals can protect themselves and their hard-earned assets from the devastating financial consequences of crypto scams.
The surge in cryptocurrency scams, particularly investment fraud schemes involving Tether and USD Coin, is a growing concern. The Denver Division of the FBI has issued a warning about the increase in these scams, targeting mature adults and resulting in substantial financial losses. It is crucial for individuals to be cautious and skeptical when approached with investment opportunities that promise high returns with minimal risk. By following the tips and taking appropriate actions outlined in this article, you can better protect yourself from falling victim to crypto investment fraud. Stay informed, be proactive, and report any fraudulent activities to the relevant authorities to help combat these scams and safeguard others from becoming victims.