Cryptocurrency is more popular than ever. Unfortunately, however, as the popularity of cryptocurrency has grown, so has the temptation for scammers to capitalize on it. Given the tendency for fraud to increase during times of crisis, experts predict cryptocurrency scams to increase in the wake of the COVID-19 pandemic. The FBI recently issued guidance on this issue, identifying the types of scams to look out for as the country struggles to deal with the spread of the coronavirus.
Common Cryptocurrency Scams
Investment Scams – Scammers sometimes offer fraudulent investments in new types of cryptocurrencies. Often, these scams offer suspiciously high returns for relatively small investments. In reality, scammers simply pocket the money they collect for their non-existent cryptocurrency and utilize the complexities of cryptocurrency to hide the destination of the funds from the authorities.
Home-Based Employment Scams – In another popular cryptocurrency scam, a criminal poses as an employer and asks an unsuspecting victim to accept a donation of funds into his or her bank account. What the victim doesn’t know, however, is that these funds are stolen. The victim of the scam is then directed to deposit the funds into a crypto kiosk. The victim’s acceptance and transfer of the stolen money is an illegal act, and he or she could actually be held criminally liable for assisting with the transfer.
Paying for Non-Existent Products – Scammers have recently begun to lure customers from trusted e-commerce sites by offering products that claim to prevent the coronavirus. Where the victims actually end up, however, is on unrelated messaging sites that accept payment in cryptocurrencies for products that don’t actually exist.
Blackmail – A popular scam involving blackmail for cryptocurrency has recently been updated by scammers to take advantage of fears of COVID-19. In this scam, a scammer threatens to infect a victim’s family with the coronavirus unless the victim sends cryptocurrency to the scammer.
Tips for Avoiding COVID-19 Cryptocurrency Scams
In addition to remaining aware of the scams discussed above, below are some tips to avoid falling prey to scammers during the COVID-19 crisis.
- Conduct thorough research on all investment opportunities.
- Verify that an organization is legitimate and accepts cryptocurrency before making any payments.
- Never use personal bank accounts for work-from-home activities or provide bank account information to anyone not named on the account.
- If threatened with blackmail or any other criminal activity, contact law enforcement immediately.
Do You Have Information About Cryptocurrency Fraud?
The government relies on whistleblowers to help fight cryptocurrency fraud, and it rewards them with significant financial compensation for their efforts. Therefore, if you have information that an entity or individual has committed cryptocurrency fraud, you should contact an SEC whistleblower attorney to begin your case. At Jeff Newman Law, we’ll provide you with first-rate representation and dependable service in your SEC whistleblower case. Please contact us today to learn more about your rights under the SEC whistleblower program.