The Denver Division of the Federal Bureau of Investigation (FBI) is warning that as cryptocurrencies become more common, the number of people falling victim to crypto scams is on the rise, and so are financial losses. Investigators out of the Denver office are seeing an emerging trend in which mature adults are caught up in crypto investment scams, especially involving Tether (USDT) and USD Coin (USDC).
In a common scenario, the victim is approached on a social media platform, dating app, or discussion forum with a cryptocurrency investment opportunity. The victim is directed to a link or phone number to set up the investment account. This is a scam—the link or phone number is controlled by the fraudster, who has set up a fictitious support site. Once the victim transfers the funds, the fraudster disappears with the money.
Nationwide, of the reported crypto fraud losses that began on social media, most are investment scams: Since 2021, $575 million of all crypto fraud losses reported to the Federal Trade Commission (FTC) were about bogus investment opportunities, far more than any other fraud type. More than 46,000 people have reported losing over $1 billion in crypto. Their reported losses in 2021 were nearly 60 times what they were in 2018.
In 2021, Coloradans reported losing almost $25 million to investment scams, according to the FBI’s Internet Crime Complaint Center (IC3). Coloradans 60 and older lost more money to scams than any other age group.
Here are some examples of the cryptocurrency investment fraud victims in Colorado recently:
- A 52-year-old Aurora man lost approximately $600,000 in a Tether investment fraud scheme.
- A 61-year-old Denver woman female lost approximately $1.3 million in a Tether investment fraud scheme
- A 62-year-old Evergreen man lost approximately $350,000 in a Tether investment fraud scheme
- A couple from Parker in their late 40s lost approximately $1.2 million in a Tether investment fraud scheme
- A 53-year-old Timnath man lost approximately $600,000 in a USD Coin investment fraud scheme
“As more people use and invest in cryptocurrency, the more crypto scams we see,” said Special Agent in Charge Mark Michalek. “The FBI will investigate allegations of crypto scams, but the best path is not to fall victim in the first place. FBI Denver wants people to be aware of the warning signs and be alert to the ways fraudsters try to reel them in.”
Cryptocurrency investment scams often promise you can “make lots of money” with “zero risk,” and the con often starts on social media, online dating apps, or other sites. These scams can start with an unexpected text, email, or call. And, with investment scams, crypto is central in two ways: It can be both the investment and the payment.
Specifically, Tether (USDT) and USD Coin (USDC) are tied to the U.S. dollar; an investment pitch into these cryptocurrencies should raise additional red flags that the opportunity is likely a scam.
FBI Denver is seeing two major cons when it comes to cryptocurrency investment fraud:
- A so-called “investment manager” contacts you. 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.
- 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.
Here are some tips to protect yourself against cryptocurrency investment fraud (compiled from FBI Denver, IC3, and FTC):
- 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. If a company or person promises you’ll make a profit, that’s a scam. If an investment opportunity sounds too good to be true, it likely is. Be cautious of get-rich-quick schemes.
- 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.”
- Navigate to any websites independently rather than using a provided link or QR code.
- If you are asked to use a new app, download it via your usual app store, not from a provided link.
- If you are emailing with a purported investment advisor, make sure the representative has a business email account.
- Resist any pressure to act quickly. A legitimate advisor will not push you to make a hasty decision.
If you believe you are a victim of cryptocurrency investment fraud:
- File a complaint with the FBI’s Internet Crime Complaint Center at www.ic3.gov.
- If you paid in cryptocurrency, report the fraud to the exchange company you used to send the money.
- Keep all original documentation, emails, faxes, and logs of all communications, including financial transaction information.
- Expect additional attempts at contact. The scammers often share or sell their victim database information.
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