Cryptocurrency is quickly becoming a hot new trend in investing, but unfortunately many people don’t understand how the digital payment system works, which has created a breeding ground for a variety of scams.
Better Business Bureau (BBB) performed a recent investigative study into cryptocurrency, looking at the many facets of the digital payment and the variety of ways criminals are exploiting it to steal from investors and other victims of common scams.
Cryptocurrency is a form of digital money where encryption technology can enable anyone anywhere to send and receive payments. It exists as lines of computer code that are stored in a “crypto wallet.” “Bitcoins” were developed in 2009 and have become the most popular form of cryptocurrency.
Cryptocurrency is attractive to scammers because it is relatively unregulated and difficult to recoup once it’s lost. In 2021, BBBs received more than 2,400 complaints and 1,200 reports to BBB Scam Tracker that represent more than $15 million in losses. The numbers represent a tripling of cases in the past three years, and a tripling of losses in just the past two years. Cryptocurrency scams also accounted for the second highest type of scam losses reported to the Federal Trade Commission (FTC) in 2021 at approximately $750 million.
Here’s a common example of the type of report BBB has seen from victims of investment scams involving cryptocurrency:
A consumer told BBB that she began learning about Bitcoin…
