FBI warns of rise in digital currency scams amid COVID-19 pandemic

It shouldn’t be a surprise to anyone that some unscrupulous individuals would take advantage of the coronavirus pandemic to steal money from others. However, the U.S. Federal Bureau of Investigation (FBI) wants to make sure that consumers are aware of what’s going on, and has issued a warning that scammers are actively using COVID-19 to try to steal funds, both in the form of fiat and digital currency. A number of frauds have already surfaced, and the agency is ready to tackle any that it uncovers. 

The FBI issued a warning, explaining, “People of all ages, including the elderly, are being victimized by criminals through cryptocurrency-related fraud schemes. Developments in cryptocurrency technology and an increasing number of businesses accepting it as payment have driven the growing popularity and accessibility of cryptocurrency. There are not only numerous virtual asset service providers online but also thousands of cryptocurrency kiosks located throughout the world which are exploited by criminals to facilitate their schemes. Many traditional financial crimes and money laundering schemes are now orchestrated via cryptocurrencies.”

Most digital currency enthusiasts already realize that there are a number of scams out there and, for the most part, the space has been able to avoid falling victim to the fraud. However, there are still plenty of others that may not be as knowledgeable, and for whom the warning is intended. People need to know to stay away from any attempts at blackmail, especially those that threaten to launch coronavirus infections, and be especially diligent when receiving emails about work-from-home opportunities or offers to send a “donation” to help ease the COVID-19 economic strain. These donations are almost always nothing more than an attempt by a scammer to launder funds, using an unwitting individual as a mule. 

The FBI adds in its warning, “Criminals often pitch fraudulent investments in a ‘new’ and developing cryptocurrency, such as an initial coin offering (ICO) or other investment vehicle to take a victim’s money. These scams typically involve scenarios that seem ‘too good to be true’—offering large monetary returns for a short-term, small investment. The reality is that scammers steal the investment money for personal use and utilize the complexities of cryptocurrency to hide the true destination of the stolen funds.”

That advice has been solid since the first investment of any kind was introduced. However, it is magnitudes easier to send digital currencies than fiat, and often with fewer controls in place to track the legitimacy of the transactions. While countries around the world are working on regulations that would require all digital currency transactions to be registered, the process has not yet been completely implemented, and consumers are still vulnerable. Until those processes are implemented, it’s important that individuals take the necessary precautions to protect themselves from digital currency fraud.

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