Investing in cryptocurrency, or crypto, can be a prime target for scammers.
Here are a few things to know:
Cryptocurrency is a digital currency that’s held in a digital wallet. Your digital wallet has a wallet address and is protected by a password or “private keys.”
Cryptocurrency is purchased in a number of ways using U.S. dollars through exchanges, apps, websites, or a cryptocurrency ATM.
The currency can be used to purchase goods and services like other forms of money. The value of the currency changes constantly. That’s why it’s considered an investment.
Scammers’ Targets:
Your money (both cryptocurrency and U.S. dollars)
Your crypto wallet’s private keys
Fraudsters’ Tactics:
Scammers will target your money or your digital wallet’s private keys in many of the same ways other scams are perpetrated:
Promising guaranteed profits if you invest with them but either don’t allow you to withdraw your funds or send you to fake websites that allow them to steal your dollars. These promises could from a new “friend” online or unexpected contact from an “investment manager.”
Fake websites or apps that either steal your personal information or your U.S. dollars when you think you’re buying cryptocurrency.
Phishing emails that attempt to obtain your crypto wallet’s private keys.
Things to Remember:
There’s no such thing as a guaranteed profit in any type of investment. If it seems too good to be true, it probably is. Avoid any cryptocurrency plan that promises guaranteed returns.
Only invest in things you understand. Legit cryptocurrency should have a whitepaper that explains the design of the currency and how it will work. If it doesn’t make sense – or even exist – be very careful.
Keep your crypto wallet’s private keys private. Be careful not to give them to anyone or enter them on websites or apps. If you’re asked to provide your wallet’s keys to participate, it’s highly likely a scam.
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