SCAMS BULLETIN Host Jay White is a volunteer attorney who provides free legal services for low income seniors in San Mateo County, Caifoenia.

October 14, 2019

CRYPTOCURRENCY RISK

Have you ventured into the cryptocurrency world yet?

Bitcoin is a common form of cryptocurrency. It’s a virtual currency because it only exists as numbers in computers, though it has a dollar (or other) value based on supply and demand.

Dubious initial bitcoin offerings (ICOs) remain a key source of scams. It’s simple. Investors put up their money for a new currency and then the organizers disappear with the cash.

Other scammers have been operating digital versions of a Ponzi scheme, in which early investors make money, encouraging others to join in—and lose their investment.

YouTube and Code Generator Scams

Various other cryptocurrency scams have come to light recently via YouTube, the online social media video service. The service has been used by fake alleged influencers. It’s virtually impossible for YouTube to spot them before they do their dirty work.

Protect Yourself

*If you want to avoid a cryptocurrency scam, our best advice is not to use these types of currencies at all unless you fully understand how they work.

*Many retail and consumer sites that accept cryptocurrencies like Bitcoin usually have alternative payment methods such as credit cards or PayPal.

*From an investment perspective, here are three more key actions you should take to avoid falling victim to a cryptocurrency scam:

*Don’t make investment decisions based on the word of someone online. Always work with a trusted financial adviser.

*Before you trade on a cryptocurrency exchange, check out their reputation, most notably how long they’ve been operating and whether they are operating “in the open,” as against dark web exchanges that nearly always turn out to be scams.

*Check that there’s a business plan for any cryptocurrency offering. All legitimate ICOs are required to draw up a business plan.

An experienced financial adviser could help avoid a scam.

Attribution: scambusters.org

NOTE: An extensive explanation of cryptocurrency, bitcoin and blockchain can be found on Wikipedia.

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