Scammers Taking Advantage of Cryptocurrency Craze

Tuesday, June 14th, 2022 -- 1:00 PM

(WBAY) -Consumer experts say scammers are cashing in on the cryptocurrency craze and taking advantage of people who aren’t familiar with digital currency.

A new report from the Federal Trade Commission says between January 2021 and March 2022, people lost more than one billion dollars to fraud involving cryptocurrency. The Better Business Bureau is warning consumers about a dramatic spike in scams that often begin on social media.

“Scams are like viruses. They mutate, they adapt,” says Steve Baker, Investigations Specialist, Better Business Bureau. Baker has been tracking these scams for the BBB. “Twenty-to-thirty percent of the romance fraud complaints we’re seeing over the last year involve this crypto investment,” Baker says.

Digital money doesn’t exist in a physical form, but rather lines of computer code. Cryptocurrency operates outside of the traditional banking system, which protections of bank deposits or credit card transactions.

“Unfortunately cryptocurrency has always been used for fraud. That’s one of the major attractions for it,” says Baker. “It’s the criminals that use it. For example, you’ve got dark net websites that sell guns and drugs and stolen credit card numbers. Those are all paid for with Bitcoin and cryptocurrency. That’s their medium of exchange.”

Baker says the scam often starts on social media. Scammers lure victim into bogus investment opportunities. “The victim gets direction to a website or app, website connected to app. They send money, which is then converted into Bitcoin or another sort of cryptocurrency. And then there’s a website where they establish a user name and password,” says Baker. “It looks very professional. It looks real, like the money is appreciating in value.”

A Better Business Bureau study found reports of fraud complaints involving crypto have tripled in the past three years. It found a lack of regulation and consumer education resulted in the dramatic increase.

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