In 2021, cryptocurrency schemes were the second-riskiest scheme. But they’re also the ones where the most money is lost.
SAN ANTONIO — The Better Business Bureau reports investing in cryptocurrency is riskier than ever. It’s likely you’ll lose a pretty penny, too; most people who fall victim to schemes lose about $1,200.
The BBB report said many of those schemers use social media to promote investment opportunities. Social media also allows schemers to reach out to people directly, usually posing as a friend to encourage people to invest.
“Cybercriminals are always one step ahead,” said Jason Meza, with the BBB. “We’ve seen companies make glorified claims about the new crypto products to boost the market price of their own share. The thought behind this is trying to launch a fraudulent company that lacks any transparency, and financial reports to get you to invest and you end up losing your money. Scammers also imitate successful companies. They just simply duplicate or imitate a really successful company to get you to invest.”
It’s a red flag if you see an investment with great returns and low risks. Also, be wary if you get an unsolicited, aggressive or cold-call offer to invest in crypto.
“It’s really tough to decide what is the real deal and what’s not, and it’s a risky investment,” Meza said. “Yes, there is opportunity. But, again, there is a major, major risk factor, especially in the new online platform that is virtual currency. So yes, we are seeing it locally. We are seeing it globally. It’s a trend.”
The BBB said about 7,000 people reported losses of $8 million, so this is one scheme where you stand to lose a lot. If you can’t afford to lose the money, don’t invest in crypto. If you chose to make a small investment in cryptocurrency, incorporate the purchase into an overall investment strategy.
“Making any big investment decision, it’s always important to understand the concept and what platform is best for you,” said Meza. “Another issue is they’re (cryptocurrencies) high-risk. Only time is going to tell whether virtual currency moves into a major component of the financial markets, and if so, will these investments make sense as part of your strategy for diverse portfolios?
“People are interested because they can remain anonymous and their ability to keep transactions secret. A lot of that plays into this, but you can be hacked if you use virtual currency. So if you lose your private keys, that’s it. You lose access to your funds.”
Do your homework before you buy a virtual currency. There are few consumer protections on cryptocurrency, so once the money is gone, there is no chance to recover it.