Protect Your Wallet! Top Tips to Avoid Cryptocurrency Scams!
Background: By now you’ve heard the term cryptocurrency or crypto, it has become as common a currency in wallets as the dollar or a credit card. It is a currency that Forbes defines as “a digital, encrypted, and decentralized medium of exchange” (Ashford 2023), what makes this digital currency unique however is that there is no governing body that controls the manufacturing, distribution or trade of it like the Federal Reserve would for the U.S. Dollar. They come in a variety of types, much like other nations have their own version of currency, the most popular being Bitcoin and Ethereum. However new cryptocurrencies are being created each day by technologically proficient individuals who understand the coding and blockchain (system that records transactions digitally) that comprise the foundation of each of these currencies. Users of crypto use their phones, tablets, other internet connected devices, or even specially designated ATMs to buy and sell their cryptocurrencies much like you would use a credit card to complete a transaction at a store.
For sake of this article, we will centralize our attention on Bitcoin, the largest and most popular cryptocurrency currently on the market and commonly used in financial scams towards the unsuspecting. Despite using Bitcoin in lieu of cryptocurrency or crypto, it cannot be stressed enough that the same application of the scam discussed below can be applied to any version of cryptocurrency.
Scam Alert: You will receive an unsolicited call from an unknown number, possibly with a toll-free area code to offer legitimacy to the corporate persona of the caller. Once you answer, or if sent to voicemail, the caller will identify themselves either as an investment manager or similar financial position. The caller will offer a promise to grow your money in this new growing Bitcoin market, providing a sales pitch for the rapid growth it has experienced over the last few years; BUT only if you buy Bitcoin and transfer it into a “secure” account that they have registered for you. Once you accept this seemingly gracious offer, they will provide your “personalized” account number and security pin that they have set up to secure your transaction.
In this initial offering the scam is set up, the key to ensuring that you don’t become a victim is to remember that if you didn’t set up the account yourself, then it is not yours. Since it is not your account, it is not secure.
Other additives that the scammer/caller may use is claiming an affiliation or even impersonating a celebrity who wants to help you become rich, exercising the fame and aura of that individual to influence you into buying in on the information from a public and trusted person. This description will talk about how they’ll help you invest to double your money like they did so that you can be rich like them.
This description uses a cognitive trick called anchoring to try to connect the dots in your own mind so that you believe that you naturally reached the conclusion that this isn’t a scam and that you’ll end up like the celebrity they’re claiming to be or be affiliated with. Anchoring is a common technique used in negotiation processes of law enforcement during hostage negotiations to secure their release to the board room when executives are trying to secure a lucrative contract. It is extremely effective but can be avoided. Understanding that no “get rich quick” scheme has been replicated and that if it sounds too good to be true, it most likely is.
Another angle the caller/scammer may utilize involves an online “love interest” in lieu of a financial advisor. However, the core story remains the same. They will want you to send cryptocurrency, and they’ll invest it for you, promising the outcome of living “happily ever after”. They will provide guarantees of large payouts and returns.
Remember no financial institution or investor can make that guarantee let alone in the short timeline that they promise. A key indicator to look out for is the assurance of “low risk”. This is another common cognitive trick that scammers will utilize called grounding in which they scammer will use common language that you associate with a positive emotion. They will use terms like “low risk, high reward” because it is in our nature to value both of those for self-preservation.
Prevention: There is a litany of ways to prevent yourself from being the victim of cryptocurrency scams.
Resist the pressure to act quickly: Scammers create a sense of urgency to produce fear and lure victims into immediate action. Call 911 immediately if you feel there is a danger to yourself or a loved one. Be cautious of unsolicited phone calls, mailings (paper or electronic), and door-to-door service offers.
Never give or send any personally identifiable information: Scammers are experts at intelligence gathering to exploit further information that they use for their financial gain, while stealing yours. Make sure all computer anti-virus and security software and malware protections are up to date, using reputable anti-virus software and firewalls to prevent scammers from accessing your personal information on your devices.
Avoid pop-ups: If you receive a pop-up on your device, close it immediately or disconnect from the internet if unable to close it. These are used to spread malicious software onto your devices and steal your information. Utilize pop-up blockers to help prevent them.
Reporting: If you believe you or someone you may know has been a victim of a scam, contact your local police department. They can guide you in the process in filing a complaint with the FBI’s Internet Crime Complaint Center at ic3.gov.
Integrated Security Concepts LLC provides services for Corporations, Municipalities, and other entities that provide in-depth awareness of current scams and other nefarious acts that pose a threat to our well being and livelihoods, contact us today to see how we can help you secure the people and assets you value.
References:
Ashford, Kate. 2023. What is Cryptocurrency. Edited by Benjamin Curry. February 16. Accessed August 3, 2023. 2024.
