The week of October 3 is World Investor Week, a great time to remember that the too-good-to- be-true investment opportunity often is exactly that. Investment scams are among the oldest out there. With lots of people looking for a way to make money on investing, there are at least as many looking to take it away. One area where investment scams have thrived as of late is in cryptocurrency, which has taken a quantum leap recently.
A cryptocurrency is an electronic currency — not paper bills or metal coins — that operates outside governments and central banks, such as the Federal Reserve Bank. Owners keep cryptocurrencies, such as Bitcoin, in electronic wallets, which are password protected. You can transfer money between wallets anonymously to buy a pizza, sell a car or even pay a ransom, provided the other party in the transaction accepts Bitcoins.
The Federal Trade Commission received nearly 6,800 complaints of cryptocurrency investment scams from October 2020 through March 2021, up from 570 in the same period a year before. Reported losses during that time grew more than tenfold, to above $80 million.
Three things that are common in crypto scams are: fake websites with bogus testimonials, fake celebrity appeals via direct messages on social media, and buy-now campaigns designed to create pressure to invest right away. If you are thinking about investing in cryptocurrency, remember that most of the consumer protections that exist with…
