FBI Expects Rise in Cryptocurrency Scams as Result of COVID-19

The FBI is anticipating a rise in scams involving cryptocurrency related to the COVID-19 (coronavirus) pandemic; it’s, therefore, warning the public to be on the lookout. “Fraudsters are leveraging increased fear and uncertainty during the COVID-19 pandemic to steal your money and launder it through the complex cryptocurrency ecosystem,” the FBI said in a statement.

The increase in fraudulent activity is a result, the FBI says, of the growing popularity and accessibility of cryptocurrency, especially as an increasing number of businesses are accepting it as a form of payment in the COVID-19 crisis.

The FBI says to be on the lookout for the following types of fraud schemes:

  • Blackmail Attempts — Threatening emails or letters in which scammers claim to have access to your personal information or knowledge of your “dirty secrets” and demand payment in Bitcoin to prevent release of this information have been circulating for years. The new COVID-19 twist is that the correspondence claims that the writer will both release your information and infect you and/or your family with coronavirus unless payment is sent to a Bitcoin wallet.
  • Work from Home Scams — Scammers, posing as employers, may ask you to accept a “donation” of funds into your own bank account and to deposit them into a crypto kiosk. The so-called “donation” is likely money stolen from others and your acceptance and transfer of the stolen money is considered illegal money mule activity and potentially unlicensed money transmission.
  • Paying for Non-Existent Treatments or Equipment — Scammers have been known to lure customers from trusted e-commerce sites offering products that claim to prevent COVID-19 onto unrelated and unregulated messaging sites to accept payment in cryptocurrencies for products that do not actually exist.
  • Investment Scams — Criminals often pitch fraudulent investments in a “new” and developing cryptocurrency, such as an initial coin offering (ICO) or other investment vehicle to take a victim’s money. These scams typically involve scenarios that seem “too good to be true”—offering large monetary returns for a short-term, small investment. The reality is that scammers steal the investment money for personal use and utilize the complexities of cryptocurrency to hide the true destination of the stolen funds. 

While there are legitimate charities, investment platforms and e-commerce sites that use cryptocurrency, the FBI notes that pressure to use a virtual currency is a “significant red flag.”

To better protect yourself from fraud, the FBI says to remember the following tips: 

  • Verify that a vendor/charity is legitimate and accepts cryptocurrency before sending payments/donations
  • Conduct extensive research on potential investment opportunities
  • Do not use your personal bank accounts for work-from-home business-related activity or provide your bank account information to someone who is not named on the account
  • Contact law enforcement before paying out blackmail and/or extortion attempts and before converting your money into cryptocurrency to pay them

If you believe you are the victim of a fraud or if you want to report suspicious activity, the FBI says to contact your local field office or visit its Internet Crime Complaint Center at ic3.gov.

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