Is Bitcoin Just a Plain Old Scam or is There More to It?
A sort of digital currency known as cryptocurrency typically only exists online. To purchase bitcoin, you often use your phone, computer, or a cryptocurrency ATM.
Bitcoin and Ethereum are well-known cryptocurrencies. People utilize cryptocurrencies for a variety of purposes, including rapid payments, avoiding transaction costs charged by conventional banks, or because it provides some privacy. Some people invest in cryptocurrencies in the hopes that their value will increase.
A cryptocurrency ATM, a website, an app, or an exchange are all places where you can purchase cryptocurrencies. Some people generate cryptocurrencies through a labor-intensive process known as “mine,” which necessitates sophisticated computer hardware to resolve extremely challenging math problems. Cryptocurrency is maintained in a digital wallet, which can be online, on your computer, or on an external hard drive.
A wallet address, which is typically a lengthy string of numbers and letters, is a feature of a digital wallet. You’re likely to discover that no one can help you recover your funds if something bad happens to your wallet or your cryptocurrency funds, such as your online exchange platform closing down, sending cryptocurrency to the wrong person, forgetting your password to your digital wallet, or having your digital wallet stolen or compromised.
Decentralized Currency Holders Could Lose a Significant Amount of Actual Money
The decentralized currency’s holders could lose a significant amount of actual money in addition to the crypto crash. A recent report from the Federal Trade Commission (FTC) claims that the use of cryptocurrencies in scams is on the rise, either as an essential component of the fraud itself or just as a means of payment for the scammers.
Between January 2021 and March 2022, 46,000 people reportedly lost more than $1 billion in cryptocurrency to scammers, according to the FTC, which emphasizes that this figure only includes those who reported their losses to the agency. Since most victims don’t report their losses to the FTC, it’s possible that the true number of scam victims and crypto losses is substantially greater.
Even if the $1 billion figure may not accurately reflect the total sum of money stolen, it does show how much more prevalent crypto frauds have become: In comparison to 2018, reported losses were roughly 60 times higher in 2021. Additionally, losses were already almost half what they were for the entire year of 2021 in just the first quarter of 2022. Crypto currently accounts for one-fourth of the money lost in recorded frauds.
Cryptocurrency already has bad notoriety for being a haven for unlawful transactions, hacker ransoms, and money laundering. Fans will have a difficult time arguing that virtual money should have a bigger place in reputable financial markets and banks, given its growing involvement in traditional scams. Although President Biden issued an executive order to develop cryptocurrency laws in March of last year, it is unclear what such regulations will be, when they will be implemented, and whether they would do anything to stop scams.
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Things to Be Aware of in Order to Prevent a Crypto Con
Scammers are always coming up with new cryptocurrency-based schemes to steal your money. Here are a few things to be aware of in order to prevent a crypto con.
Cryptocurrency payments are only requested by con artists. No trustworthy company will ask you to send cryptocurrencies in advance, neither to make a purchase nor to safeguard your funds. Always a swindle, that. Profits or large returns are only guaranteed by con artists. Don’t believe those who assure you that you may profit from the cryptocurrency markets rapidly and effortlessly.
Never combine investment advice with online dating. It’s a fraud if someone you meet on a dating website or app asks you to send them cryptocurrency or wants to teach you how to invest in cryptocurrencies. Recognize scams involving cryptocurrencies. Scammers are still utilizing some tried-and-true scam techniques, but now they want to be paid in cryptocurrencies. One of the most common methods con artists get you to buy bitcoin and deliver it to them is through investment scams. However, scammers also use other strategies, such as posing as companies, authorities, or a romantic interest.
Investment scams frequently begin on social media or online dating apps or sites and promise that you can “earn tonnes of money” with “zero risk.” Of course, these frauds might also begin with an unexpected text, email, or phone. Additionally, cryptocurrency plays a crucial role in investment scams in that it can be used for both investments and payments.
You Can be a Victim of a Scam Through Various Strategies. Here Are a Few to Watch Out for
- Unexpectedly, a so-called “investment manager” calls you. If you buy cryptocurrencies and deposit them into their online account, they promise to grow your money. They direct you to an investment website that appears legitimate, but its claims are false, just like theirs. You won’t be able to withdraw money from your “investment account” without paying exorbitant fees if you log in at all.
- A con artist poses as a famous person who has the ability to multiply any cryptocurrency you transfer them. However, celebs aren’t getting in touch with you on social media. It’s a con artist. Additionally, your money will be lost if you click on an unexpected link they offer you or send cryptocurrency to a QR code belonging to a purported celebrity.
- An online “love interest” requests money or cryptocurrencies from you to assist with investments. That is a con. Know this: that person is a scammer as soon as they ask you for money or give you investment advice after meeting you on a dating website or app. The suggestions and offers to assist you in investing in cryptocurrencies are all frauds. If you send them cryptocurrency or any other sort of money, it will be lost and most likely not be returned.
Scammers make money-making promises or large rewards with assured returns. No one can provide those assurances. Much less quickly — much less. Additionally, investing in cryptocurrencies is not “low risk.” Therefore, it’s a scam if a business or individual says you’ll make money, even if there is a celebrity endorsement or positive investor reviews. Those are simple to fake. Scammers make free-money promises. Free money promises are always false, even though they may make mention of free cash or cryptocurrency.
Big assertions without backing or justifications are made by con artists. Regardless of the investment, learn how it operates and inquire as to where your money is going. That information is something that sincere investment managers or advisors wish to share and will support with specifics.
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