Cryptocurrency has captured the attention of those looking to make money quick and scammers have taken note.
Cryptocurrency scams jumped from the seventh riskiest scam in 2020 to second riskiest in 2021, according to the 2021 Better Business Bureau Scam Tracker Risk Report. More than 66% of people who reported falling victim to a cryptocurrency scam also reported losing money.
In Michigan, 31 scams have been reported to the BBB Scam Tracker from Jan. 2020 to March 2022.
Cryptocurrency can only be exchanged digitally and is not reliant on any central authority, such as a government or bank, to uphold or maintain it.
The elusiveness of cryptocurrency seems to give the scammers an advantage. Based on reports sent to the BBB Scam Report, Michiganders were swept up into giving more money for fraudulent taxes, maintenance fees and, in at least one instance, blackmail.
“He seems so honest but he is a fraud. He had me send him crypto for hi[m] to put into this bull crypto trades account. Once in there they make it look like it is making money,” wrote one scam victim in Bay County.
In several cases scam victims were seeking crypto investments but landed on nefarious websites or social media accounts through Tik Tok, What’s App and Telegram. Many fell into a get rich quick scheme where scammers promised payouts that never came or required more investment from the victim.
One victim from Washtenaw County was targeted by a scammer saying they had obtained Zoom footage taken unbeknownst to the victim. They claimed the victim was “the main character” in unauthorized sex tape. The scammer threatened to release the footage if they weren’t paid $2,000 in Bitcoin in two days.
“I’m sure you don’t want to be the next Jeffrey Toobin and get embarrassed in front of all your friends, family and colleagues,” wrote the scammer.
Although cryptocurrency scams have increased in prevalence they only made up 1.9% of the scams reported to BBB Scam Tracker nationally. The monetary risk, however, is what has tipped the scale. The median dollar loss from a cryptocurrency scam was $1,200, much higher than the overall median dollar loss of $169.
Reported losses from Michigan residents range from $350 to $41,000.
The BBB offers these suggestions for avoiding cryptocurrency scams:
- Be very wary of anyone offering to make you quick money with little risk.
- Scammers can pretend to be your friend on social media by hacking into their accounts. Always check directly with the person before clicking a link or paying them money.
- If somebody claims to be a broker, check them on FINRA’s BrokerCheck tool.
- Never use an online payment system to pay somebody you don’t know.
- Search BBB Scam Tracker to see if another person has reported the person or business as a scammer.
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