The crypto craze keeps growing, and you might be looking to jump in.
But before you take the plunge, you should understand the ins and outs of crypto investing and how scammers are looking to take advantage of novice investors.
In 2023, cryptocurrency-related complaints only made up 10% of financial fraud complaints received by the FBI.
But crypto complaints accounted for almost 50% of the total losses, totaling more than $5.6 billion in 2023.
In Florida, nearly $400 million was lost to crypto-related fraud.
One of the most common crypto scams is called “pig butchering,” and it starts off with a person who says they are your friend.
“These scams are quite elaborate and what consumers need to keep in mind is that scammers are playing the long game, or these crypto investors sometimes are playing the long game,” said Cinthya Lavin with the Better Business Bureau.
Lavin says pig butchering scams start when a scammer uses flattery or fake bonding to lure victims in. Once trust is built, the victims are asked to invest in what is often a fake website.
“And then once you invest a lot more, then that’s when the losses start. And that’s when your money’s gone and you can’t get it back,” Lavin said.
It’s what happened to Charles Cox.
“I had met this person named Jansen David,” Cox said.
He lost $272,000 to a crypto scammer. He says it started with a social media friend request in 2023 and then months of text message conversations.
“In addition to his job he was doing some crypto. He showed me stuff and said, do you want to try maybe investing,” Cox said.
Cox told our NBC Responds team in Washington D.C. this friend sent him a link to what appeared to be a legitimate crypto investing website.
He says he made some money and then decided to invest more. And he says he made more.
“It’s a new opportunity to make money and enhance my retirement ultimately,” Cox said.
But then after investing more than $180,000, he got a knock on the door from Adult Protective Services, and he found it was all fake.
A fake website, a fake crypto account, a fake wire transfer, and a fake name on the social media account.
So how do you safeguard against it?
For starters, be cautious of messages sent from someone you don’t know or haven’t met. Be on the lookout for signs the website could be fake like spelling errors or strange URLs. Also, if a person is promising you returns on your investment that seem too good to be true, then it probably is.
“Be careful. You’ve got someone who is basically trying to rob you, and they are doing it with a smile,” Cox said.
In Cox’s case, his bank did try to reverse the wire and get his money back but unfortunately, they were unsuccessful.
If you suspect you’ve been the victim of financial fraud, the FBI encourages you to file a complaint with its internet crime complaint center.
You should also contact your local law enforcement.
