Cryptocurrency Scams have been increasing recently with scammers directing victims to withdraw cash or wire funds to complete payment transactions to purchase cryptocurrency, a digital currency that generally exists only electronically. It is important to be alert and know how to protect yourself.
What is Cryptocurrency?
Cryptocurrency, often referred to as “crypto”, is a type of digital currency usually purchased with a phone, computer, or cryptocurrency ATM. Bitcoin and Ether are well-known cryptocurrencies, but there are many different cryptocurrencies, and new ones keep being created.
Where and how is cryptocurrency stored?
Once cryptocurrency is purchased, it can be stored in a digital wallet, which can be online, on your computer, or on an external hard drive. A digital wallet has a wallet address, which is usually a long string of numbers and letters.
Spotting Cryptocurrency Scams
Scammers are using some tried and true scam tactics — only now they’re demanding payment in cryptocurrency. Investment scams are one of the top ways scammers trick you into buying cryptocurrency and sending it on to scammers. But scammers are also impersonating businesses, government agencies, and a love interests, among other tactics.
Investment scams often promise you can “make lots of money” with “zero risk,” and often start on social media or online dating apps or sites. These scams can, of course, start with an unexpected text, email, or call, too. And, with investment scams, crypto is central in two ways: it can be both the investment and the payment. Here are some common investment scams, and how to spot them:
- A so-called “investment manager” contacts you out of the blue.They promise to grow your money — but only if you buy cryptocurrency and transfer it into their online account. The investment website they provide looks real, but it’s really fake, and so are their promises. If you log in to your “investment account,” you won’t be able to withdraw your money at all, or only if you pay high fees.
- A scammer pretends to be a celebrity who can multiply any cryptocurrency you send them.But celebrities aren’t contacting you through social media. It is a scammer. And if you click on an unexpected link they send or send cryptocurrency to a so-called celebrity’s QR code, that money will go straight to a scammer and it will be gone.
- An online “love interest” wants you to send money or cryptocurrency to help you invest.That is a scam. As soon as someone you meet on a dating site or app asks you for money, or offers you investment advice, know this: that’s a scammer. The advice and offers to help you invest in cryptocurrency are nothing but scams. If you send them crypto, or money of any kind, it’ll be gone, and you typically won’t get it back.
- Scammers guarantee that you’ll make money or promise big payouts with guaranteed returns. Nobody can make those guarantees. Much less in a short time. And there’s nothing “low risk” about cryptocurrency investments. So: if a company or person promises you’ll make a profit, that’s a scam. Even if there’s a celebrity endorsement or testimonials from happy investors. Those are easily faked.
- Scammers promise free money. They’ll promise free cash or cryptocurrency, but free money promises are always fake.
- Scammers make big claims without details or explanations.No matter what the investment, find out how it works and ask questions about where your money is going. Honest investment managers or advisors want to share that information and will back it up with details.
Business, Government, and Job Impersonators
In a business, government, or job impersonator scam, the scammer pretends to be someone you trust to convince you to send them money by buying and sending cryptocurrency.
- Scammers impersonate well-known companies.These come in waves, and scammers might say they’re from Amazon, Microsoft, FedEx, Core Bank, or many others. They’ll text, call, email, or send messages on social media — or maybe put a pop-up alert on your computer. They might say there’s fraud on your account, or your money is at risk — and to fix it, you need to buy crypto and send it to them. But that’s a scam. If you click the link in any message, answer the call, or call back the number on the pop-up, you’ll be connected to a scammer.
- Scammers impersonate new or established businesses offering fraudulent crypto coins or tokens.They’ll say the company is entering the crypto world by issuing their own coin or token. They might create social media ads, news articles or a slick website to back it all up and trick people into buying. But these crypto coins and tokens are a scam that ends up stealing money from the people who buy them. Research online to find out whether a company has issued a coin or token. It will be widely reported in established media if it is true.
- Scammers impersonate government agencies, law enforcement, or utility companies.They might say there’s a legal problem, that you owe money, or your accounts or benefits are frozen as part of an investigation. They tell you to solve the problem or protect your money by buying cryptocurrency. They might say to send it to a wallet address they give you — for “safe keeping.” Some scammers even stay on the phone with you as they direct you to a cryptocurrency ATM and give step-by-step instruction on how to insert money and convert it to cryptocurrency. They’ll direct you to send the crypto by scanning a QR code they give you, which directs the payment right into their digital wallet — and then it’s gone.
- Scammers list fake jobs on job sites.They might even send unsolicited job offers related to crypto like jobs helping recruit investors, selling or mining cryptocurrency, or helping convert cash to crypto. But these so-called “jobs” only start if you pay a fee in cryptocurrency. Which is always a scam, every time. As your first task in your “job,” these scammers send you a check to deposit into your bank account. (That check will turn out to be fake.) They’ll tell you to withdraw some of that money, buy cryptocurrency for a made-up “client,” and send it to a crypto account they give you. But if you do, the money will be gone, and you’ll be on the hook to repay that money to your bank.
To avoid business, government, and job impersonators, remember that:
- No legitimate business or government will ever email, text, or message you on social media to ask for money. And they will never demand that you buy or pay with cryptocurrency.
- Never click on a link from an unexpected text, email, or social media message, even if it seems to come from a company you know.
- Don’t pay anyone who contacts you unexpectedly, demanding payment with cryptocurrency.
- Never pay a fee to get a job. If someone asks you to pay upfront for a job or says to buy cryptocurrency as part of your job, it’s a scam.
More Tips to Protect Yourself
- Do not send payment to someone you have only spoken to online, even if you believe you have established a relationship with the individual.
- Do not follow instructions from someone you have never met to scan a QR code and send payment via a physical cryptocurrency ATM.
- Do not respond to a caller, who claims to be a representative of Core Bank, where you are an account holder, and who requests personal information or demands cryptocurrency. Contact the number listed on your card or Core Bank directly for verification.
- Do not respond to a caller from an unknown telephone number, who identifies as a person you know and requests cryptocurrency.
- Practice caution when an entity states they can only accept cryptocurrency and identifies as the government, law enforcement, a legal office, or a utility company. These entities will likely not instruct you to wire funds, send checks, send money overseas, or make deposits into unknown individuals’ accounts.
How To Report Fraud and Scams to Core Bank
If you suspect you are the victim of fraud or have been scammed, notify Core Bank as soon as possible by visiting one of our branches or by calling our Virtual Center at 402-333-9100 or 1-877-968-7672.
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