FBI warns of rise in cryptocurrency investment scams

Coloradans have been scammed out of millions of dollars, the FBI said.

DENVER — The FBI’s Denver office is warning the public of a rise in people falling victim to cryptocurrency scams, with millions of dollars in losses in Colorado alone.

Investigators are seeing an emerging trend where adults 60 and over are caught up in cryptocurrency investment scams, according to the FBI, especially involving the cryptocurrencies Tether and USD Coin.

The FBI said in a common scenario, the victim is approached on a social media platform, dating app or discussion forum with a cryptocurrency investment opportunity. It could also be a text, email or call. The victim is directed to a link or phone number to set up an investment account. 

This is a scam, according to the FBI. The link or phone number is controlled by the fraudster, who has set up a fictitious support site. Once the victim transfers the funds, the fraudster disappears with the money.

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Of the reported crypto fraud losses that began on social media, most are investment scams, the FBI said. Since 2021, $575 million of all crypto fraud losses reported to the Federal Trade Commission were about bogus investment opportunities, far more than any other fraud type. More than 46,000 people have reported losing over $1 billion in cryptocurrency. Their reported losses in 2021 were nearly 60 times what they were in 2018.

The FBI said in 2021, Coloradans reported losing almost $25 million to investment scams, and Coloradans age 60 and older lost more money to scams than any other age group.

Here are some examples of recent cryptocurrency investment fraud victims in Colorado:

  • A 52-year-old Aurora man lost approximately $600,000 in a Tether investment fraud scheme.
  • A 61-year-old Denver woman lost approximately $1.3 million in a Tether investment fraud scheme.
  • A 62-year-old Evergreen man lost approximately $350,000 in a Tether investment fraud scheme.
  • A couple from Parker in their late 40s lost approximately $1.2 million in a Tether investment fraud scheme.
  • A 53-year-old Timnath man lost approximately $600,000 in a USD Coin investment fraud scheme.

“As more people use and invest in cryptocurrency, the more crypto scams we see,” Special Agent in Charge Mark Michalek said in a statement. “The FBI will investigate allegations of crypto scams, but the best path is not to fall victim in the first place. FBI Denver wants people to be aware of the warning signs and be alert to the ways fraudsters try to reel them in.”

The FBI said it’s seeing two major cons when it comes to cryptocurrency investment fraud:

  • In the first one, a so-called “investment manager” contacts you. They promise to grow your money— if you buy cryptocurrency and transfer it into their online account. The investment website they steer you to looks real, but it’s really fake, and so are their promises. If you log in to your “investment account,” you won’t be able to withdraw your money at all, or only if you pay high fees.
  • In the second one, an online “love interest” wants you to send money or cryptocurrency to help you invest. The advice and offers to help you invest in cryptocurrency are scams. If you send them cryptocurrency, or money of any kind, it’ll be gone.

Anyone who believes they’re a victim of cryptocurrency investment fraud should take the following steps:

  • File a complaint with the FBI’s Internet Crime Complaint Center at www.ic3.gov.
  • If you paid in cryptocurrency, report the fraud to the exchange company you used to send the money.
  • Keep all original documentation, emails, faxes, and logs of all communications, including financial transaction information.
  • Expect additional attempts at contact. The scammers often share or sell their victim database information.

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