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Open a New Account Check Application Status Apply for a Loan Apply for a MortgageScammers are continually finding new ways to separate people from their money. Lately, they’ve turned their attention to cryptocurrencies for one simple reason: payments made in cryptocurrency are difficult to trace.
What are Cryptocurrencies?
Cryptocurrency is any digital currency and alternative form of payment in which transactions are managed by a decentralized online system. No central authority manages or maintains the value of a cryptocurrency, and there is no use of money or coins.
Although cryptocurrencies can be used to buy regular goods and services online, many people invest in them as they would in other assets, like stocks or precious metals. Scammers rely on the fact that cryptocurrencies are relatively new and difficult to understand. They prey on the fact that individuals may not fully understand how this currency functions and will make up false information to confuse people.
How are Cryptocurrencies used in Scams?
As a Requested Method of Payment
While the type of scam may vary, such as a Social Security scam, a tech support scam, a romance scam, etc., the fraudster requests an untraceable type of payment such as cryptocurrency or gift cards. Once the funds have been sent, they are nearly impossible to get back.
Investment Scams
This scam uses the price speculations of cryptocurrencies to create a false investment opportunity. You receive a text, email, or call about a cryptocurrency investment opportunity and receive a link to a fraudulent website which looks legitimate. The scammer convinces you to open cryptocurrency trading account to which they have secret access, and they make it look like your investment is growing. After a few of these “trades” the fraudster withdraws all your investments, the “account” is gone, and the funds untraceable.
Red Flags of a Cryptocurrency Scam