Crypto Mar 07, 2024 10:30 AM EST

BBB Issues Urgent Warning About Crypto Scams

By April Fowell

According to the Better Business Bureau, scams involving cryptocurrency and other investments are now the riskiest kind of fraud in the United States. These scammers often defraud their victims out of thousands of dollars.

BBB Issues Urgent Warning About Crypto Scams

According to the Better Business Bureau, scams involving cryptocurrency and other investments are now the riskiest kind of fraud in the United States. These scammers often defraud their victims out of thousands of dollars.
(Photo : by Michael Bocchieri/Getty Images)

Based on 67,000 allegations of scams, the BBB claimed in its annual report about the top scams of 2023 that con artists had developed inventive ways to defraud investors of their money.

According to the BBB, 80% of Americans who fell victim to cryptocurrency and investment scams last year lost money. "But many people lose much more than that" in cryptocurrency scams, according to national consumer investigative correspondent for CBS News Anna Werner, despite the fact that the typical amount lost was $3,800.

Cryptocurrency Scammers Exploit Messaging Platforms

Hackers communicate with others via text messages, social media, and video gaming platforms, boasting about how successful their cryptocurrency investment has made them financially. Werner said that as soon as the targeted victim responds, the discussion immediately shifts to an inquiry.

"This is where the crooks pressure you to purchase, trade or store digital assets - such as cryptocurrency - on fraudulent exchanges," Werner stated.

Federal officials, as well as consumer advocates, have long stated that cryptocurrency is an uncontrolled financial environment that is ripe for fraud. During the epidemic, the popularity of cryptocurrencies skyrocketed as interested investors poured money into tokens like ethereum, bitcoin, and solana. According to Forbes, the sector now has a $2.65 trillion market capitalization.

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Navigating the Risks of Cryptocurrency and Financial Frauds

Although cryptocurrency has shown to be profitable for many investors, there are still dangers involved. Formerly-respected businesses have collapsed, including FTX, which was formerly one of the largest cryptocurrency exchanges in the world. In 2022, FTX collapsed due to a $8 billion funding deficit and claims made by former CEO Sam Bankman-Fried that he had embezzled client cash to support a failing hedge fund.

Millions of dollars have been lost by cryptocurrency investors as a result of scams and hacks. This year, a 70-year-old Californian lost $720,000 in a cryptocurrency scam to a scammer. She then launched a lawsuit against Chase Bank.

The second riskiest fraud, according to the BBB, is job scams, which rounds out the list of the worst financial hazards for 2023. At that point, a con artist gets in touch with the victim and pretends to be an employer, convincing them that they have been recruited and that they must fill out employee information.

Actually, the con artist is pilfering personal data from a victim. According to the BBB, victims of job scams lost a median of $1,995 last year.

The BBB ranked online purchase frauds as the third most dangerous. Usually, victims visit a fraudulent website in order to make a purchase, but the con artist never sends the goods. According to the BBB, victims of these kinds of scams lost, on average, $71 in 2018.

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