As an investor, you must always stay vigilant against potential scams, especially those involving cryptocurrencies. According to federal officials, there has been a rise in cryptocurrency scams that originate from fake relationships established on social media, dating apps, and networking sites.
These scams typically involve scammers posing as romantic interests, old friends, or investment professionals in order to gain the trust of their targets. Once the relationship is established, the fraudsters then introduce the idea of investing in cryptocurrencies, only to eventually defraud victims through fake investments.
The Securities and Exchange Commission (SEC) has recently taken action against these types of frauds, highlighting the increasing threat they pose to retail investors. In fact, the FBI reported that consumers lost an estimated $5.6 billion from cryptocurrency-related scams in 2023, with investment scams accounting for a significant portion of those losses.
One victim, Jules, shared her experience with a crypto relationship scam on a recent FINRA podcast. She fell victim to a scammer who slowly introduced the idea of investing in bitcoin after establishing a friendship through a dating app. Jules ended up taking out personal loans to fund her investments and eventually lost thousands of dollars to the scam.
To protect yourself from falling prey to cryptocurrency scams, it’s important to follow these tips recommended by the FBI, SEC, and financial experts:
– Be cautious of investment advice or promotions from individuals you have only met online.
– Look out for domain or website names that impersonate legitimate financial institutions.
– Avoid downloading suspicious-looking apps for investing.
– Don’t let early withdrawals or supposed profits from investments give you a false sense of security.
– Beware of fake testimonials claiming to have made money.
– If an investment sounds too good to be true, it probably is.
– Double check that an investment firm is registered on BrokerCheck.
By staying informed and cautious, you can protect yourself from falling victim to cryptocurrency scams and safeguard your investments. Stay tuned for more valuable insights and tips on personal finance from Extreme Investor Network.