Common Crypto Scams to Avoid - Money Tip Tuesday

With cryptocurrency's increasing popularity, it's crucial to be aware of the prevalence of crypto scams. Cryptocurrency is a digital currency that uses cryptography to secure transactions. However, the rise of crypto has also led to a surge in scams. It's important to stay alert to spot these scams and avoid falling victim to them.   

Links:

• Report any crypto scams you encounter to any or all of the agencies below:
  • https://www.fbi.gov/contact-us
  • https://reportfraud.ftc.gov/
  • https://www.cftc.gov/complaint
  • https://www.sec.gov/submit-tip-or-complaint/tips-complaints-resources/report-suspected-securities-fraud-or-wrongdoing
  • https://www.ic3.gov/Home/Index
• Check out TCU University for financial education tips and resources!
• Follow us on Facebook, Instagram and Twitter!
• Learn more about Triangle Credit Union 

Transcript:

Welcome to Money Tip Tuesday from the Making Money Personal podcast.     

One important thing to note about cryptocurrency is the U.S. government does not back it. If your crypto account gets hacked or the company that provides storage for your wallet goes out of business, your money is gone. The government has no obligation to step in and help you get your money back. In comparison, U.S. dollars deposited into an FDIC or NCUA-insured account are safe. Those coverages insure deposits up to $250,000 in the event of a financial institution failure.   

That said, it's important not to fall for a cryptocurrency scam. Here are some common scams and their warning signs. First, suppose someone you're considering doing business with only accepts cryptocurrency payments. That should be a red flag, especially if the company demands that you send the payment before receiving any product or service.   

A common crypto scam is an investment scam. If someone asks you to invest in a new crypto coin that guarantees quick and significant returns, it's most likely a scam. Crypto investment scams can come in many forms. A scammer might pose as an investment manager promising to make you rich if you buy cryptocurrency and transfer it to their account. They might even create a fake website to trick you further. It's also known that scammers have tried to impersonate celebrities, offering to multiply any cryptocurrency you send them. Scammers will also go on dating apps to find their targets. They might seem interested in you, but it's a red flag if they start talking about crypto and try to get you to invest with them.   

Rug pull scams are also very common with cryptocurrency. Rug pull scams are when investment scammers pump up a new NFT or coin to raise funds. Once they get the money that people invested, they disappear. The way these "investments" are coded prevents people from being able to sell or trade them, making them effectively worthless.  

Another crypto scam is when fraudsters impersonate a business or the government. They might say they're from Amazon, EZ-Pass, or even your financial institution and claim that there's fraud on your account or your money is at risk. They'll say that to fix the issue, you have to send them crypto. Don't click links or respond to their messages; it is a scam.  

One last crypto scam is blackmail. Scammers might contact you saying