While traditional investment avenues such as indices, commodities, and currency are losing favor, new, more unconventional investment venues are gaining traction. In these COVID-19 times, however, no venue has seen such a surge in demand as Bitcoin. The explanation is simple: Unlike ordinary currencies or even stocks, this cryptocurrency is less vulnerable to the pandemic’s economic consequences. This fantastic opportunity, however, is tragically accompanied by risk. As Bitcoin grows in popularity, a slew of dubious online trading platforms offer the possibility to invest in it and benefit –or so they promise since you’re left with no money and no one to share the grief with at the end of the day.
The Reality of CryptoCurrency Scams
Investing in cryptocurrencies entails accepting risks, but one of them should not be getting duped. According to reports, scammers are capitalizing on the Bitcoin craze by luring individuals into phony investment opportunities in unprecedented numbers. Since October 2020, the number of reports has risen dramatically, with about 7,000 persons reporting losses totaling more than $80 million. Their claimed loss was $1,900 on average. There were nearly twelve times as many reports and about 1,000 percent more reported losses this year than this time last year. Many people have been duped into visiting websites that appear to provide possibilities to invest in or mine cryptocurrency but are actually scams. They frequently offer numerous investment tiers, with the higher the investment, the higher the alleged return. Fake testimonials and bitcoin jargon are used to make websites appear trustworthy, but promises of huge, guaranteed returns are merely frauds. These websites may even provide the impression that your money is increasing. However, when consumers try to withdraw alleged earnings, they are told to send more crypto — and then receive nothing in return.
Scammers have even used online dating to lure victims into bitcoin investment schemes. Many people have said that they thought they were in a long-distance relationship until their new love started talking about a lucrative bitcoin possibility, which they then took advantage of. Since October 2020, almost 20% of the money lost in romance scams has been transferred in cryptocurrency, with many of these reports coming from people who thought they were investing.
People may appear nice and prepared to give their “advice” on the internet, which is often a deception to attract people to participate in their scheme. According to the FTC investigation, some of these scams are built on referral networks (a sort of pyramid scheme) and work by attracting people who subsequently recruit new “investors.” Scammers ask customers to pay in bitcoin in exchange for the privilege to attract others into a program in exchange for cryptocurrency rewards. They claim that the more you play, the more money you’ll make.
Crypto novices are attracted to “bogus” websites that advertise prospects for cryptocurrency investment or mining — and many of these websites make it appear as if your investment is expanding. However, when consumers try to withdraw their apparent winnings, they are told to send even more crypto, but they never receive anything in return.
Scammers impersonate a government authority or business
Scammers are increasingly posing as government officials or businesses. Some consumers told the federal trade commission that they deposited money into bitcoin ATMs to pay imposters posing as social security administration employees. Others have reported losing money to con artists posing as coinbase, the leading bitcoin exchange, and wallet service in the United states. It’s worth noting, though, that cryptocurrency was involved with only 14% of recorded online impostor losses. Fiat currency was used by a substantially bigger percentage (86%) of the time. This ratio, however, is likely to change: the cryptocurrency sector is exploding. If current patterns continue, the percentage of digital currency losses is expected to rise in the future years.
Scams and hackers affect businesses as well as individuals
The perpetrators of the July 2020 data breach (and subsequent data leak) of the ledger, a France-based crypto wallet provider, are still profiting from the attack’s victims.
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Are Bitcoin Scams The Reason For a Sudden Increase in Value?
Scams involving cryptocurrency are a common occurrence in the financial industry, with the Federal Trade Commission (FTC) receiving complaints and allegations on a regular basis. Certain bitcoin ventures have a high level of trustworthiness and a track record of success. Others, on the other hand, are attempting to profit from this relatively young industry. Many people have claimed to have lost their entire life savings as a result of this investment fraud. The nature of this financial scam makes it difficult for authorities to stay on top of things, allowing the scammers to avoid the reach of the law. Before you invest, keep in mind that you’ll be exposing yourself to a lot of danger with little or no reward.
Since its inception, cryptocurrency has been easy prey for internet criminals. Because this digital money isn’t linked to any bank or government, it’s considerably more difficult to track them down once they’ve been stolen. It’s also why many hackers prefer to demand ransom in this currency from their victims. But we’re talking about a different type of bitcoin con. This time, a slew of websites are attempting to entice investors to purchase and sell Bitcoin by using the rise in its price (which has reached an all-time high). At first, everything appears to be honest, and the investor even sees gains, but after a while, they begin to lose large quantities of money.
The broker leaves when the client decides to cut their losses and call it quits. Nobody answers the calls or responds to emails, and the same broker who used to be available to investors 24/7 suddenly disappears. Even in this circumstance, the victim and their money are not completely out of the woods – keep reading to find out more.
The Challenges of Recovering Money in Crypto Scams
Many people believe that the anonymity of bitcoin makes it appealing to criminals. Major digital currencies, such as Bitcoin and Ether, are quite tractable in practice. Every transaction is recorded in perpetuity on a public blockchain, which functions as a decentralized database. Criminals become exposed when they try to cash out their bitcoins into dollars, €, or another traditional fiat currency, even if their true names aren’t associated. This is because exchanging cryptocurrency for fiat money necessitates the use of a cryptocurrency exchange like Coinbase or Binance. Many nations, including the United States, regulate these exchanges, and they are obligated to collect information about their users. A court order or a warrant might compel the exchanges to reveal the proprietors of those wallets. Indeed, after tracing the currencies through a complex web of transaction records, the US Department of Justice has charged two people with laundering $4.5 billion in Bitcoin from a 2016 Bitfinex attack.
The bigger issue is actually getting the money back. International transfers in fiat currency frequently do not truly move funds—banks can simply modify their records of who owns what, allowing transactions to be halted or reversed. On the other hand, blockchain transfers are fully automated and nearly difficult to tamper with. Tokens may be transferred across borders without the need for outside approval, and all transfers are final: if a scammer dupes a victim into sending crypto, or if a hacker takes control of a wallet and sends money elsewhere, there is no way to reverse the transaction. Contacting a professional funds recovery site, on the other hand, may be able to help you track down the scammers and recover your lost funds.
It’s obviously easier to avoid this type of fraud than it is to recover money that has been stolen. In general, a large number of these sites are deceptive; therefore, purchasing Bitcoin from somewhere else is preferable. Crypto ATMs allow you to trade cryptocurrency using cash. You can also locate Bitcoin buyers and sellers on websites that aren’t trading platforms, such as Coinbase. There are techniques to locate trustworthy online trading platforms if you decide to utilize one. First and foremost, always work on a controlled site. It’s easy to discern if a site is controlled or not since if it has one, it’s usually displayed prominently. Reading reviews on sites like Facebook, Trustpilot, SiteJabber, and the like is another effective way to identify if the website you’re looking at can be trusted. However, note that some of the reviews on the site, both good and bad, are fake. It’s still possible to reclaim your cryptocurrency.
Even if you’ve already been a victim, don’t despair; there’s still hope. The Global Payback is an organization that specializes in tracking down criminals and expecting them to pay – literally. Because you never know which email or invoice will be relevant
In court, it’s crucial to maintain all records of encounters with these thieves. Before you do anything further, you should cancel any billing orders you’ve placed with the dubious website as soon as you realize you’ve been deceived. We’d even suggest canceling your credit card if that was your payment method. After that, go to the police station and file a report. While it won’t help you find the criminals, it will supply you with formal paperwork that will come in good if you ever have to go before a judge. Last but not least, don’t be afraid to speak up. Tell your story on the internet. Write testimonials for the trading company. Tell your pals everything that happened to you, and don’t leave anything out. Attempt to ensure that as few people as possible are subjected to this terrible experience. Sure, you won’t get your money back, but you’ll be doing a nice deed in the process.
Here Are Some Important Points to Keep in Mind if you Want to Play It Safe(r) with Cryptocurrency
- Why Guaranteed large returns or statements that your cryptocurrency would be multiplied are almost always scams.
- The investment is the coin itself. You make money if you are fortunate enough to sell it for more than you paid for it. Period.
- If a caller, love interest, organization, or anybody else demands cryptocurrency, it’s almost always a hoax.
Recognize Bitcoin Scams From a Mile Away!
It’s easy to be struck by how stupid the victims appear to be in each of these incidents. The trouble is that when you think you’ve met your future spouse, you’re conversing with someone you think is a close friend, or you think you’ve found a definite thing, it’s easy to lose your skepticism. When these complicated influences distort your judgment, it’s easy to miss red flags. That’s why it’s critical to remember a few guidelines whenever someone you’ve never met approaches you with an opportunity to profit from Bitcoin.
• Don’t be fooled by the hype. Any claim of a guaranteed return, especially one that is very large, should be regarded as a scam. As victims can confirm, there are virtually no legal investments that can double your money in a month or even a year. Similarly, any suggestion that your Bitcoin investment may be “multiplied” is false.
• Bitcoin for the sake of Bitcoin. Bitcoin’s current surge in value is due to genuine investors’ belief that they would be able to sell it to someone else for a better price in the future. This is what makes cryptocurrency such a risky investment. Always avoid “investment possibilities” that claim to be able to help you get in on unusual or rare Bitcoin trades.
• Bitcoin is one of my obsessions. Assume you meet someone online who strongly urges you to invest in Bitcoin. It’s almost certain that they’re lying to you. Meanwhile, the government–particularly the Social Security Administration–doesn’t go after you and demand immediate cryptocurrency payments. Disengage and call the cops if you’re dealing with someone who is pressuring you to adopt Bitcoin in some way.
If you think you’ve been a victim of a crypto scam, report it to the Federal Trade Commission, not only that but reach out to the Global Payback experts to recover your stolen sum!