Tech Matters: Beware of crypto scams or risk losing your digital dollars
With the boom in popularity of buying cryptocurrency, crypto scams have ridden the wave right alongside innocent buyers who may be looking to invest just a few hundred bucks a month in the hopes of turning their investment into a fortune with little effort. That’s exactly the situation that cybercriminals look for: a nice big group of people to scam.
Scams can pop up anywhere, in your email, on Facebook and now, according to a new report from cybersecurity firm Sophos, in dating apps. In its report on CryptoRom, they found a scam that led to $1.4 million being stolen from victims across the United States and Europe who were on popular dating apps Tinder and Hinge. The nature of digital currencies makes it difficult to regain the stolen money, making this tactic even more appealing to scammers.
Sophos posted this story from a victim that illustrates the structure of the scam: “I met this guy on Bumble and then moved to Whatsapp after a few days of talking, he started talking about cryptocurrency and investment. He asked me to download this app and I unfortunately was gullible enough to believe him. I started with $200 then invested another $1000. At first, I was able to withdraw my money. Then he told me about the good trends in the coming days and even lent me $3000 to top off my wallet … when I try to withdraw my money now, the app is asking me to pay taxes or it won’t be able to process my withdrawal.”
This one checks all the scammer boxes: Hook an unsuspecting victim with an emotional appeal. With dating apps, that’s a simple gesture of interest followed by conversation. Then get the person to download a malicious app and spend a little money. Increase the amount of money, and even seed the person’s account with their own money to make the process seem legitimate. Once the target amount of money from the victim has been achieved, block their access to the funds. Done! The scammer has gained virtually untraceable funds and the victim’s investment is gone.
While dating apps are a newer platform to initiate these types of scams, that doesn’t mean you won’t encounter them in other places. My son-in-law’s mother was persuaded to deposit $10,000 in a PayPal account ostensibly to buy Bitcoin over the telephone.
Here are some signs to watch for to help you avoid cryptocurrency scams. If the offer-maker tells you that a profit is guaranteed, it’s a scam. Nobody can guarantee a set return such as doubling your money, especially in a short time frame. Be wary of big schemes with no information to back up the claims or details on how it works. Legitimate business people will be able to explain in detail how an investment works. Still, you should do your own research. Use Google to verify the name of the company and the name of the cryptocurrency. Add words like review, scam and complaint to your search.
If someone asks you to download an app that is not available to the public in the App Store (this ploy is used by the CryptoRom scam described above), it is a scam. Be even more careful with apps from the Google Play Store because they do not receive the same rigorous review as those in Apple’s store.
Other cryptocurrency scams may involve blackmail. The scammers will try to convince you they have incriminating or embarrassing files about you and demand you pay in cryptocurrency to avoid public exposure. Never pay when threatened, and certainly not in untraceable cryptocurrency.
Disregard any social media posts or emails that ask you to send cryptocurrency, even if they appear to be from someone you know or a reputable spokesperson. Their account could have been hacked.
If you suspect a scam, report it to the Federal Trade Commission (FTC) at ReportFraud.ftc.gov, the Commodity Futures Trading Commission (CFTC) at CFTC.gov/complaint and the U.S. Securities and Exchange Commission (SEC) at sec.gov/tcr. If you sent cryptocurrency, you should also report the scam to the cryptocurrency exchange company you used to send the money.
Leslie Meredith has been writing about technology for more than a decade. As a mom of four, value, usefulness and online safety take priority. Have a question? Email Leslie at firstname.lastname@example.org.