BBB warns about cryptocurrency scams on the rise

COLUMBIA, Mo. (KMIZ)

The Better Business Bureau is warning about scams involving cryptocurrency are on the rise.

Michelle Gleba with the BBB is answering questions about cryptocurrency.

What is cryptocurrency?

Cryptocurrency is a form of digital money where encryption technology can enable anyone anywhere to send and receive payments. Bitcoin is the most popular form of cryptocurrency – and it’s available for purchase at thousands of Bitcoin ATMs – and is increasingly accepted as payment in certain retail transactions. However -- it’s important to note cryptocurrency operates outside the traditional banking system and isn’t subject to the same protections as bank deposits or credit card transactions.

What are some of the highlights from the study?

The study explains how there are many facets of cryptocurrency and scammers are finding various ways to exploit this in order to commit fraud or steal money from investors. These types of scams tend to originate on social media – A scammer may pretend to be your friend and tell you about their success in crypto investing. Cryptocurrency shows up in other scams as well – For example, romance scammers have started convincing their victims to invest in cryptocurrency through sophisticated fake apps. When a person falls victim to this type of scam, they usually take a huge financial loss – Cryptocurrency was the second-highest scam loss reported to the Federal Trade Commission in 2021, with losses of $750 million.

Are there ways to avoid cryptocurrency scams?

Be careful about claims made on social media. Be cautious of celebrity endorsements – These types of endorsements are usually not authorized and even if they are, the celebrity may be paid for the effort and may not know much about it. If you’ve lost money to a cryptocurrency scam, beware of fake recovery companies. Scam companies sometimes claim they can recover stolen money – for a fee. Watch out for fake reviews. Scammers often create fake reviews for their own companies. Only download apps from Google Play or the App Store. Trusted apps don’t eliminate the threat of app scams, but they do offer a basic level of protection. And don’t believe promises of guaranteed returns. No one can guarantee how an investment will perform.