FBI warns of cryptocurrency scams
Cryptocurrency is new and exciting, but it’s also complicated to understand —which means it can be easy to get duped. On Wednesday, experts at the FBI’s Portland Division gave some pointers on how not to get conned.
It’s especially timely with so many videos and posts about cryptocurrency on social media. The videos and posts often tout the money people can make or information that could help people break into it.
“Cryptocurrency is a digital currency that you use to invest or buy goods and in order to buy or get into cryptocurrency, you have to use your traditional fiat currency such as the U.S. dollar,” said Brandon, who is an FBI forensic accountant who only went by his first name.
He said there are thousands of different types of cryptocurrencies available that are not fully regulated yet, but are generally legal to buy and use in the United States.
“In fact, many companies are now accepting cryptocurrency for payments of traditional […] retail sales or goods and services,” Brandon said.
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Cryptocurrency is growing fast in popularity, and as with anything involving money, there are a lot of people who want to steal it.
“We are seeing a commensurate rise in fraud schemes, basically providing the fraudsters or criminals more ways to steal your money,” said Kieran Ramsey, special agent in charge at the FBI Portland Field Office.
He said scammers have reinvented traditional fraud schemes. Here are the types of scams Ramsey listed:
- Romance scams: Typically involve an online relationship where one person creates a false sense of intimacy then asks the other person to send them money using cryptocurrency.
- Lottery scams: Someone is made to think they’ve won the lottery, but before they can collect their winnings, must pay money first.
- Investment scams: A fraudster convinces a person they’ll make a lot of money quickly by investing in cryptocurrency, then before the victim knows it, their money is gone.
- Impersonation scam: A familiar person, company, organization or even government entity appears to reach out to a person and asks for sensitive information or for funds to be transferred via cryptocurrency.
“If a seemingly credible person or retail establishment or government agency, for that matter, claims that they cannot accept any form of payment other than cryptocurrency, it’s likely a scam,” Ramsey said.
He said credible entities will accept payments in the form of traditional bank transfers, credit and debit card payments or cash, not just cryptocurrency.
“Consumers need to do their research and not fall prey to somebody looking to exploit your eagerness to get in on the next big thing,” said Ramsey.
He said anytime someone sees a demand for a crypto-only payments, that should immediately cause a red flag to go up.
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It can be easy for people to get ripped off, especially because there are many opportunities for people to transfer money to scammers. Brandon said there are more than 100 cryptocurrency ATMs in the Portland metro area where people can go and transfer their physical cash electronically to someone halfway around the world. People can also acquire cash from the ATMs if they already have a cryptocurrency account. Supervisory special agent, Gabe Gundersen with Oregon’s Cyber Task Force said it’s not the ATMs themselves that are the issue, though they can be a tool to help scammers swindle people out of their money. That leads to a huge range of losses.
“It’s a few hundred bucks or a few thousand. Some of the larger ones [are] well over seven figures, well over a million dollars,” said Gundersen.
He estimated the FBI’s Portland Division receives about a thousand reports a year from Oregonians who think they’ve been scammed into giving their money to a thief by way of cryptocurrency.
The FBI experts said people should look out for are unsolicited emails, texts, QR codes or other messages. They said there are plenty of legitimate cryptocurrency websites, forums, and transactions but before you take the dive, do the research.
If you think you’ve been scammed, you can report it at ic3.gov, the website for the FBI’s Internet Crime Complaint Center.