(TNS) — Cryptocurrency scams are increasing, with about 46,000 people reporting they’ve lost more than $1 billion, the Denver office of the FBI warns.
Recent trends commonly involve the cryptocurrencies Tether and USD Coin, according to a news release Thursday. The agency says in one common scenario, people are directed to set up investment accounts from social media, dating apps or discussion forums. Links or phone numbers they are sent are controlled by fraudsters, who steal money transferred by the victim into their fake investment accounts.
People in Colorado lost about $25 million to investment scams in 2021, according to the release. Some notable victims include a couple in Parker losing about $1.2 million to a Tether scam and a 61-year-old woman in Denver losing about $1.3 million, also involving Tether.
Cryptocurrency can be both the investment and the payment in these scams, the FBI says. Common red flags in investment pitches include promises of making easy money, guaranteed returns or low risk. Cryptocurrency investments inherently carry high risk, according to the release.
The FBI says unsolicited contacts about investment opportunities from “investment managers” or people on dating sites are scams.
“The FBI will investigate allegations of crypto scams, but the best path is not to fall victim in the first place,” said the Denver field office’s Special Agent in Charge Mark Michalek in a statement.
Tips for avoiding cryptocurrency scams include researching currencies and companies along with words like “review,” “scam” and “complaint”; not using provided links or QR codes to access websites; making sure someone who claims to be an investment advisor has a business email account; and resisting pressure to act quickly.
Based in blockchain technology, cryptocurrency is a digital method of trading money. According to Forbes and Nerdwallet, it is decentralized in the sense that it does not have a system of banks or other traditional financial institutions that act as intermediaries to facilitate its trade. It also does not have a unified regulatory framework that governs it.
While Tether and USD Coin are backed by the U.S. dollar, other popular cryptocurrencies do not have tangible assets backing their value — making the value of crypto inherently volatile. Crypto’s value is especially sensitive to supply, demand, and market.
© 2023 The Gazette (Colorado Springs, Colo.). Distributed by Tribune Content Agency, LLC.