If you invest in cryptocurrency, the Better Business Bureau warns, beware of scams.
Cryptocurrency is an electronic money which operates outside governments and central banks. Owners keep cryptocurrencies, such as Bitcoin, in electronic wallets, which are password protected. You can transfer money between wallets anonymously to buy a pizza, sell a car or even pay a ransom, provided the other party in the transaction accepts Bitcoins.
Bitcoins can be bought and sold on exchanges using U.S. dollars and other traditional currencies. And new Bitcoins are created by using a computer to solve complex mathematical problems, a process called “mining,” which requires huge computing power and lots of electricity. The value of cryptocurrency can change daily, according to market conditions.
Because the trades are conducted anonymously online, cryptocurrency can be ideal for fraud. You interact with people you never meet.
Some scams involve the creation of new cryptocurrency, in which investors are worried they will miss out and they invest. Other schemes involve mining that promises a huge return on investment.
Additionally, some cryptocurrency schemes have a COVID-19 twist. Here is a look at a few:
• Emails are sent to potential victims, pretending to come from one of the major cryptocurrency exchanges, alerting subscribers to a coronavirus issue affecting their account. If it lands in the inbox of someone who has an account with this exchange, it tries to trick them into clicking a link that supposedly connects with their account. It’s a fake page in which victims may be convinced to give away their sign-in details. Then their entire account in untraceably drained.
• In another cryptocurrency scam, a message purports to come from a charity, the government’s Center for Disease Control or the World Health Organization seeking cryptocurrency donations to fight the pandemic. The attraction to the scammers is that these donations are untraceable.
• Scammers also claim to have medical supplies or treatments that can be paid for with virtual currencies.
• In a blackmail scheme, the crooks send a message claiming they have COVID and threaten to spread it to the victim’s family unless they pay a fee. The scammer even claims to know where the victim lives, who they talked to and how they spent their days. This can easily be found on social media. The scammers asks for $4,000 to be paid in bitcoin.
These scam artists get their money right away and victims often lose everything.
For more BBB tips, go tobbb.org or call 1-800-388-2222.