December 5, 2019

BITCOIN SCAMS ON THE RISE

Bitcoin is a form of cryptocurrency. It is a virtual currency. It is based on math and exists only as numbers on the internet. It has value based mostly on supply and demand.

Earlier, scammers tried to get you to wire them money. Then, they demanded payment with gift cards. Now, scammers are luring people into paying them with Bitcoin.

Here are ways scammers are trying to get you to pay with Bitcoin:

* Blackmail Scam. Someone says they know about an alleged affair, or something else embarrassing to you, and demands payments with Bitcoin or another cryptocurrency in exchange for keeping quiet.

* Online Chain Referral Schemes. This type of scam works like a chain letter: someone promises that you’ll make money if you pay into the scheme. But, in a twist, these scammers say you have to use cryptocurrency to pay for the right to recruit other people into the chain…so that you’ll then be rewarded with more cryptocurrency. Except you won’t be rewarded. Instead, you will lose money.

* Bogus Investment and Business Opportunities. Someone might offer you investment and business opportunities that promise to make big money for you, or give you financial freedom. You may be offered a guarantee to make money.  But remember, only a scammer will guarantee that you will make money — in dollars or in cryptocurrency.

From an investment perspective, there are actions you can take to avoid falling victim to a cryptocurrency scam:

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

*Before you trade on a cryptocurrency exchange, check out their reputation. How long have they been operating as a legitimate entity?

*Check that there is a business plan for any cryptocurrency offering.

Scammers might use threats, intimidation, and high-pressure tactics to get you to pay right away. But, that’s not only a scam. It is also a criminal extortion attempt. Report it to the local police, the FBI, and the FTC at ftc.gov/complaint.

Attb: Federal Trade Commission

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