Cryptocurrency, or crypto as it is sometimes referred to, can be extremely volatile. Even so, many people have decided to invest in it. Keep in mind that when it comes to money, it doesn’t take long for a scammer to come up with a way to try to fool you out of it. If you decide to invest in cryptocurrency, be aware that the Securities and Exchange Commission (SEC) recently warned of scammers looking for ways to relieve you of your money.
CRYPTO PONZI SCHEME
In this twist on a classic Ponzi scheme, a scammer will try to recruit investors with promises of big returns with a high-end website, catchy testimonials, and attractive statistics. However, these are generally a ruse to get you to invest more and more money while making it hard for you to access your money.
Typically seen on social media sites, scammers will impersonate celebrities, influencers, or popular investors to get people to invest. Once you have sent your money, it is typically never returned.
HOW TO PROTECT YOURSELF
Be wary of promises of “guaranteed” high investment returns, a classic warning sign for any investment, warns the SEC. If an investment opportunity sounds too good to be true, it likely is.
Make sure to only work with licensed, registered sellers. You can search the background of anyone offering investments through a search tool like Investor.gov.
Set up very strong passwords for these accounts and use two-factor verification for any crypto accounts or digital wallets.
Be aware of any phishing scams that may target your cryptocurrency. If you or a loved one does fall victim to a cryptocurrency scheme, report it to your local consumer protection agency.