Experts at the Portland division of the Federal Bureau of Investigation (FBI) are telling people what they can do to avoid cryptocurrency scams, which have seemingly become much more prominent and aggressive over the past few years.
The FBI Says Crypto Scams Are On the Rise
It seems like crypto-based crime has become a serious issue given that the prices of many leading digital currencies such as bitcoin have surged in recent years. Just two months ago, the world’s number one digital currency by market cap hit a new all-time high of approximately $68,000, while Ethereum shot up to nearly $5,000 per unit.
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With these surges, many criminals have sought to take advantage of the growing space, and Chainalysis – a blockchain analysis company – has put out several reports discussing the damage that’s been done. The most recent one says that nearly $9 billion in crypto funds were laundered in 2021 alone.
Brandon – a forensic accountant at the FBI who is only going by his first name in this interview – recently discussed cryptocurrency and some of the things that traders can look out for. He says:
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.
He says that one of the big problems with the crypto space is that it is virtually unregulated. There are several new cryptocurrencies entering the space every day, none of which follow any laws. Despite this, they are not illegal in the United States. He says:
In fact, many companies are now accepting cryptocurrency for payments of traditional… retail sales of goods and services.
Kieran Ramsey – an FBI agent working with the Portland division – says that fraud involving crypto is on the rise, and that people really need to keep their eyes open for certain red flags. He comments:
We are seeing a commensurate rise in fraud schemes, basically providing the fraudsters or criminals more ways to steal your money.
Among the most common schemes criminals are pulling are romance scams. They get to know someone through an online dating app, and all seems well. Suddenly, out of the blue, they reach out to them and say that they are having money problems and can the person send them some digital currency funds. The person – believing the relationship to be real – sends money over and never gets it back.
Leaving People Broken and Penniless
In addition, the criminal disappears after that and the relationship ends abruptly, leaving the victim with empty pockets and a broken heart.
There has also been a surge in lottery scams, in which someone is led to believe that they have won a large lottery of some kind, but before they can get their money, they must pay a crypto fee.