How to Avoid Cryptocurrency Scams
Cryptocurrency is on the rise, but so are the scams.
According to the Better Business Bureau® (BBB®), reports about fraudulent activity involving cryptocurrency have tripled in the past three years and cryptocurrency accounted for the second highest scam losses reported to the Federal Trade Commission in 2021, with losses of $750 million.
Cryptocurrency (also called crypto) is a difficult concept to grasp which makes it easier for fraudsters to trick people into clicking unknown links to get their bank information. At Farmers & Merchants Bank, we’re always looking for ways to keep your money safe. Here are a few ways to avoid falling into a cryptocurrency scam.
Know what cryptocurrency is
Cryptocurrency is a digital currency, that’s designed to work as a medium of exchange for goods and services. It uses encryption algorithms to create new units, and secure and verify transactions. It has no physical form (like a dollar bill), living virtually on the internet. Crypto is decentralized and isn’t backed by any government or institution, making it easy for scammers to take advantage of people. The most popular cryptocurrency is Bitcoin, but there’s also Ethereum, Litecoin, and Ripple.
Be wary of “friends” who reach out on social media to tell you how they made money with crypto
Many fraudsters are hacking people’s Instagram and Facebook accounts and using those to connect with more people from a “friendly” angle. However, trust your gut if their messages feel different from how they normally type or if they are pushing you to give them information or to download something. Try calling your friend by phone to see if it’s really them. If it’s not, consider reporting their account to protect other people.
Look carefully at email addresses and website addresses
Phishing is a fraudulent attempt to get personal information from you online and many crypto scams start this way. These work by trying to trick people into logging in and then capturing their login credentials which can be used to steal money or lead you to fake sites that impersonate real companies. Be vigilant about these, especially when viewing sites on your phone.
Only download apps from Google Play or the App Store
When downloading new apps, only use the trusted stores. While these don’t eliminate the threat of app scams, they do offer a basic level of protection. However, if after downloading you’re coming across errors or it’s asking you to download more things, it may contain malicious software so delete it as soon as possible.
Don’t believe promises of guaranteed returns
No one can guarantee how an investment will perform, and that includes crypto. If you want to invest in something long-term that’s safe and secure, come see us to talk about our Time Certificates or Individual Retirement Accounts (IRA).
At Farmers & Merchants Bank, we’re always here to help you make smart decisions about your money. If you think you may have fallen victim to a crypto scam, contact your nearest branch to get in touch with the Fraud Squad as soon as possible.