A so-called “investment manager” contacts you out of the blue. They promise to grow your money — but only if you buy cryptocurrency and transfer it into their online account. The investment website they steer you to looks real, but it’s really fake, and so are their promises. If you log in to your “investment account,” you won’t be able to withdraw your money at all, or only if you pay high fees.

How to Spot A Cryptocurrency Scam

• A scammer pretends to be a celebrity who can multiply any cryptocurrency you send them. But celebrities aren’t contacting you through social media. It’s a scammer. And if you click on an unexpected link they send or send cryptocurrency to a so-called celebrity’s QR code, that money will go straight to a scammer and it’ll be gone.

• An online “love interest” wants you to send money or cryptocurrency to help you invest. That’s a scam. As soon as someone you meet on a dating site or app asks you for money, or offers you investment advice, know this: that’s a scammer. The advice and offers to help you invest in cryptocurrency are nothing but scams. If you send them crypto, or money of any kind, it’ll be gone, and you typically won’t get it back.

• Scammers guarantee that you’ll make money or promise big payouts with guaranteed returns. Nobody can make those guarantees. Much less in a short time. And there’s nothing “low risk” about cryptocurrency investments. So: if a company or person promises you’ll make a profit, that’s a scam. Even if there’s a celebrity endorsement or testimonials from happy investors. Those are easily faked.

• Scammers promise free money. They’ll promise free cash or cryptocurrency, but free money promises are always fake.

• Scammers make big claims without details or explanations. No matter what the investment, find out how it works and ask questions about where your money is going. Honest investment managers or advisors want to share that information and will back it up with details.

• Before you invest in crypto, search online for the name of the company or person and the cryptocurrency name, plus words like “review,” “scam,” or “complaint.” See what others are saying.

• Business, government, and job impersonators. In a business, government, or job impersonator scam, the scammer pretends to be someone you trust to convince you to send them money by buying and sending cryptocurrency.

• Scammers impersonate well-known companies. These come in waves, and scammers might say they’re from Amazon, Microsoft, FedEx, your bank, or many others. They’ll text, call, email, or send messages on social media — or maybe put a pop-up alert on your computer. They might say there’s fraud on your account, or your money is at risk — and to fix it, you need to buy crypto and send it to them. But that’s a scam. If you click the link in any message, answer the call, or call back the number on the pop-up, you’ll be connected to a scammer.

• Scammers impersonate new or established businesses offering fraudulent crypto coins or tokens. They’ll say the company is entering the crypto world by issuing their own coin or token. They might create social media ads, news articles or a slick website to back it all up and trick people into buying. But these crypto coins and tokens are a scam that ends up stealing money from the people who buy them. Research online to find out whether a company has issued a coin or token. It will be widely reported in established media if it is true.

• Scammers impersonate government agencies, law enforcement, or utility companies. They might say there’s a legal problem that you owe money, or your accounts or benefits are frozen as part of an investigation. They tell you to solve the problem or protect your money by buying cryptocurrency. They might say to send it to a wallet address they give you — for “safe keeping.” Some scammers even stay on the phone with you as they direct you to a cryptocurrency ATM and give step-by-step instruction on how to insert money and convert it to cryptocurrency. They’ll direct you to send the crypto by scanning a QR code they give you, which directs the payment right into their digital wallet — and then it’s gone.

• Scammer’s list fake jobs on job sites. They might even send unsolicited job offers related to crypto like jobs helping recruit investors, selling or mining cryptocurrency, or helping convert cash to crypto. But these so-called “jobs” only start if you pay a fee in cryptocurrency. Which is always a scam every time. As your first task in your “job,” these scammers send you a check to deposit into your bank account. (That check will turn out to be fake.) They’ll tell you to withdraw some of that money, buy cryptocurrency for a made-up “client,” and send it to a crypto account they give you. But if you do, the money will be gone, and you’ll be on the hook to repay that money to your bank.

To avoid business, government and job impersonators, know that
• No legitimate business or government will ever email, text, or message you on social media to ask for money. And they will never demand that you buy or pay with cryptocurrency.

• Never click on a link from an unexpected text, email, or social media message, even if it seems to come from a company you know.

• Don’t pay anyone who contacts you unexpectedly, demanding payment with cryptocurrency.

• Never pay a fee to get a job. If someone asks you to pay upfront for a job or says to buy cryptocurrency as part of your job, it’s a scam.

• Blackmail scams
Scammers might send emails or U.S. mail to your home saying they have embarrassing or compromising photos, videos, or personal information about you. Then, they threaten to make it public unless you pay them in cryptocurrency. Don’t do it. This is blackmail and a criminal extortion attempt. Report it to the Tracingia LLC immediately.

Scam artists know no bounds—that also applies to stealing your cryptocurrency. Swindlers exploit various schemes to lure victims into fraudulent crypto investments. They even go as far as entering into fake relationships through dating apps like Tinder. Headlines like “Crypto and Romance Scams Continue to Cost Victims Billions” and “A Romance Scammer Took Her Life Savings in Crypto” are becoming commonplace. In fact, crypto romance scammers conned victims out of $139 million last year, according to a 2022 fraud report by the Federal Trade Commission (FTC). But that’s just one type of scam of many. The FTC also found that more than 46,000 consumers reported losing more than $1 billion in crypto between Jan. 1, 2021 and March 31, 2022. And that might be just the tip of the iceberg—there are likely more victims out there who didn’t report their incidents.

Webber, partner at Tracingia, a cyber-security firm focused on financial fraud, says his practice has seen a strong increase in victims seeking help with hacked crypto accounts. “Retail investors considering crypto investments need to understand the elevated risks and should employ heightened safeguards to help ensure they do not become the next victim,” Webber says. To avoid schemes that prey upon crypto enthusiasts, here’s a guide to common crypto scams.

What Are Crypto Scams? Crypto scams are like any other financial scam, except the scammers are after your crypto assets rather than your cash. Crypto scammers use many of the same tactics employed in other financial crimes, such as pump-and-dump scams that lure investors to purchase an asset with fake claims about its value or outright attempts to steal digital assets.

This latter type of scam could involve breaking into a crypto wallet or getting an investor to send a digital asset as a form of payment for a fraudulent transaction, says Juliet, wealth advisor and director of technology and cybersecurity for Tracingia. LLC. The goal is always to manipulate victims into divulging personal data or transferring valuable digital assets like non-fungible tokens (NFTs) to the perpetrator’s account. “As an instrument, crypto scams are particularly appealing to nefarious agents who enjoy cryptocurrency’s swift conversion to fiat money, ready-to-use third-party transaction applications and rich obfuscation techniques,” says Chengqi “John” Guo, professor of computing information systems and business analytics at James Madison University.

Tracingia Core Values

At Tracingia our culture comes to life through these five core values:

• Do the right thing
• Put our clients first
• Lead with exceptional ideas
• Commit to diversity and inclusion
• Recover and repatriate to the victim.