Crypto Scams

What are Crypto Assets?

Crypto assets include cryptocurrencies, shares of blockchain companies, or participation in cryptocurrency funds, initial coin offerings (ICOs), initial token offerings (ITOs), and initial exchange offerings (IEOs).

How Does a Crypto Asset-related Scam Work?

There are all kinds of different crypto related scams. Here are some to watch out for.

• • • A scammer may claim to place an investor’s money in a proprietary crypto asset trading platform, while promising high, guaranteed returns with little or no risk. Watch out for promises of guaranteed returns with little or no risk.
    • Once the investor pays, often by digital currency, the scammer may stop communicating with the investor. Scammers often trick the investor into sending money overseas, without knowing they are doing so, making it very difficult for investor to get it back.
    •  Alternatively, when the investor checks their account on the crypto asset trading platform, it may show that the investor has made high returns on the investment; however, the stated trading profits are fake.
    • A scammer may ask the investor to send more money (claiming that it is needed to pay taxes or other fees), in order for the investor to withdraw profits made through the proprietary crypto asset trading platform. It’s a trap: they are after even more of your money.
    • If an investor refuses to send more money, their info can be given or sold to another scammer – who will pose as an asset recovery service, and in turn, scam even more money out of the investor.

Watch out for one or more of these characteristics of crypto asset-related scams:

• • • “Guaranteed” high return on an investment. All investments have risk, and investors should question any investments that have a “guaranteed” return.
    • Complicated jargon and language that is difficult to understand. Scammers often use complex new technologies as an opportunity to carry out fraudulent investment schemes, including emerging technologies like blockchain or artificial intelligence. Investors should always be suspicious of sales pitches that are difficult to understand.
    • Unlicensed salesperson. Many investment frauds involve unlicensed individuals or unregistered firms. Learn how to check the registration of an individual or firm here.
    • Unsolicited offers. Some fraudulent investment schemes operate by sending unsolicited sales pitches to their victims. Exercise extreme caution if you receive an unsolicited communication. Some examples are email messages, telephone calls, direct messages through social media, or internet pop-up advertisements and videos.
    • Pressure to buy. Scammers may try to create a false sense of urgency to take advantage of an investment “before it’s too late”. Take your time  researching an investment opportunity, ask questions, search the internet, and talk to a registered professional before making a decision.