The Truth About Cryptocurrency: Avoiding Scams and Heartbreak Part 3

If you haven’t read Part 2 of this series, please click here to read.

In Part 2 of this series, we discussed scammers using emails and computer pop ups to trigger their schemes. Scammers will send legitimate looking emails that may convince you to call them. Scammers may also send emails that when opened, will trigger a pop up on your computer stating issues need to be addressed with a software on your computer. Do NOT call the phone number listed in the email or popup! Always do your own research to find a legitimate phone number to call and verify the information. As a reminder, legitimate companies or agencies will NEVER ask you to pay in cryptocurrencies, such as Bitcoin.

There’s absolutely nothing wrong with being interested in cryptocurrency. It’s a fascinating world, but the world of cryptocurrency can be hard to understand and navigate. Because of this, scammers are taking advantage of the complexity.

Scammers are not afraid of complexity. A popular scheme that all cryptocurrency investors must be aware of are fake cryptocurrency exchange websites and fake cryptocurrency brokers. Yes, just like the very real stock exchange, cryptocurrency also has a stock market and scammers create websites posing as legitimate exchanges or brokers to steal your money.

Think of it this way - you’re going to invest in the traditional stock market, so you find a broker or investment website to guide you in the stock exchange. These resources help you monitor stocks and make decisions about when and where to invest, or when to sell. Just like the traditional stock exchange, there are legitimate versions of investment bankers and investment websites for the cryptocurrency stock exchange, but there are plenty that are fake.

A fake cryptocurrency exchange website will allow you to deposit money into your account like any other investment site. The website will show money in your account and reflect changes in your stock investments.

There are also fake cryptocurrency stock brokers. They’ll have you deposit money or cryptocurrency into their exchange account and send you updates with how your investments are doing, most likely via text. You might even receive daily screenshots of your investments.

One day, you might see that your cryptocurrency stock is doing well and want to sell. When you try to withdraw your funds from the website, you get an error message: You need to verify your phone number again, your email is incomplete, etcetera. Your funds are inaccessible. Or when you ask your cryptocurrency stock broker to sell your stock and send you the money, suddenly you’ve been blocked or ghosted.

The reality is, there is nothing wrong with your account and the broker was never real. The moment you deposited money into the “exchange,” scammers transferred the funds away. The investments you saw fluctuating in value and the funds you saw in your account were all fake. It was smoke and mirrors, and now your money is gone.

Now, if you’ve gotten this far and you’re still interested in investing in cryptocurrency, here are some pointers from investigators with the Mesa County Sheriff’s Office on how to avoid the scams and fake exchanges:

• The most suspicious websites are the ones created within the last six months to a year.
• Always search for legitimate documentation about the company. 
• Always search for reviews about the company.
   

In the end, if you believe you are the victim of a financial scam, call the Mesa County Sheriff's Office at 970-242-6707.