Scammers know that everyday people don’t want to miss out on making easy money on “the next big thing.”
Today, that next big thing is cryptocurrency. You’ve likely heard the terms tossed around on social media or in the news: Bitcoin, cryptocurrency, blockchain and NFT.
Stories related to cryptocurrency portray people making significant amounts of money in the blink of an eye.
With all the excitement related to these newer technologies, it is easy to get caught up in the hype.
Because most people are unfamiliar with how cryptocurrency works or its associated risks, the world of digital currency is a dream scenario for con artists.
Here are some quick facts related to cryptocurrency:
• Cryptocurrency, also known as crypto, is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on a central authority, such as a government or bank, to uphold or maintain it.
• Crypto is largely unregulated and not protected.
• Crypto and its related transactions are hard to trace.
• Bitcoin is a type of cryptocurrency widely considered the most popular.
• There are more than 18,000 types of cryptocurrencies.
• Crypto is typically held by an individual in a “crypto wallet.”
• Cryptocurrency relies on a technology called blockchain. It is a sort of digital ledger that records transactions made across a decentralized network of computers that are linked together via the Internet.
• NFT stands for Non-Fungible Token. Like crypto, these bits of data are stored on a blockchain and represent a unique digital “item.” NFTs can be bought or sold as unique, one-of-a kind, items.
Getting scammed out of your hard-earned money can happen with just a few clicks.
Bad actors may pose as a friend or family member on social media, or the scammer may pretend to be an investment manager offering to help you invest in cryptocurrency.
Since this is not a regulated currency, it is very easy to transfer a significant amount of money into cryptocurrency, which becomes almost instantly untraceable.
At first a victim may be able to monitor their “investment.” But when it comes time to access those funds, the investor quickly finds out they cannot access their money.
Protecting yourself and being aware of these scammers is your first line of defense. Here are some tips to help prevent falling prey to crypto-related scams:
• Government agencies and utilities will never contact you asking to be paid via crypto or at a Bitcoin ATM.
• Sending crypto, or any type of currency to someone you’ve never met or whose legitimacy is unconfirmed, is generally a bad idea.
• Do not take information at face value. Instead, investigate any offers to invest.
• Before clicking on links, check the URL multiple times to verify its legitimacy.
• Never provide sensitive or personal information to anyone who has made an unsolicited contact.
• If you do have a crypto wallet, never share your private key or seed phrase with anyone.
• The adage “if it sounds too good to be true, it probably is” still applies to these new technologies, so be wary of a get-rich-quick pitch.
• If you think you have been contacted by a scammer, report the contact online via the Internet crimes complaint center (ic3.gov).
Before you act, stop and think. Crypto scammers use urgency as a tool to trick their victims into making a bad decision. “You have to act now,” or “send crypto to this address” are hallmark signs that you are dealing with a scammer.
If you fall victim to any of these types of scams, don’t be embarrassed. Report the scam to your law enforcement agency.
These types of crimes often go unreported because people feel foolish that they were duped.
As your District Attorney, I’m committed to increasing communication and accessibility between the DA’s Office and the public. I hope these consumer and public safety tips have been helpful.
Summer Stephen is the district attorney for San Diego County.