What do you know about cryptocurrency? Do you keep up on Bitcoin value and trading? How do you buy cryptocurrency and what can you use it for?
I don’t intend for this column to serve as a comprehensive study guide for the topic of cryptocurrency, but it’s probably time for us all to understand just a little about the topic. Why? Because the use of cryptocurrency (or “crypto” for short) seems to become more enmeshed with scams and fraud every day. This stuff is not going away anytime soon. So if we want our scam radars to work effectively, they should know what to look for.
Thanks to a Fulton, Illinois woman, I can share a real life story about cryptocurrency and its role in a near-miss scam. My friend posted a profile on a dating website. In due course, she connected with someone whose profile made him attractive as a match for her. He was an American expatriate, currently employed as a professional in Eastern Europe.
She exchanged messages with him for several months. Their online relationship seemed headed into very positive territory. He never made a direct ask for money, but he complained at times about how the heavy-handed regulations of the host country tied up his own money, and until he cleared that up, he needed to stay overseas. My friend liked his honesty and how “he never asked me for money.” Plus he sent some photographs of real documents, including his US passport, to vouch for himself.
My friend asked what she could do to get him out of this jam? His advice – deposit a very large sum of cash into a Bitcoin account with an online crypto exchange. She went online and figured out how to do this, and did it. Her local bank questioned her about this, causing some hesitation. The boyfriend gave her a Bitcoin wallet account number which he directed her to transfer the money into. But…heeding those warnings from her bank, from the Fulton police, and me, she just could not pull the trigger (or click the mouse) and finalize the transfer.
The boyfriend’s whole story fell apart when I proved to my friend that the US passport image she relied on as a proof of life, was a forgery. So a happy ending, and a near miss, to what could have been a disaster.
Here are some points all of us need to understand about cryptocurrency:
– Crypto is not backed by any government. It’s digital currency which exists only electronically. You can’t get a coin or paper bill of crypto, to hold or spend anywhere.
– Crypto comes in many different “brands”. Bitcoin and Ethereum are two major ones, but hundreds exist, and brands increase by the day. You buy crypto online or at kiosks, where you exchange real money for crypto.
– Crypto lacks any legal protections for users. Credit cards and debit cards come with consumer protections when something goes wrong. Crypto does not.
– You can’t reverse a crypto payment. You can’t do a “stop payment” or ask your bank to freeze a transaction
– The crypto market is full of huge swings up and down. It crashes and rebounds in a head-spinning manner. Remember, it’s not regulated. There is no FDIC insurance to cover deposits if a crypto company goes bankrupt, or the currency is stolen.
Scammers are making increasing use of crypto, for a lot of the reasons listed here. They love operating in an environment lacking regulation or enforcement. A surefire way to recognize a scam is anytime someone asks you to make a payment using crypto. That will always be a scam.
CONTACT SENIORS VS. CRIME
Let me know about scams, fraud, or other crookedness you run across. Most of what I learn, I learn from you. Contact me at Seniors vs. Crime, Clinton County Sheriff’s Office, at 242-9211, Ext. 4433, or email me at email@example.com
Randy Meier is the director of Seniors vs. Crime, which operates in conjunction with the Clinton County Sheriff’s Office.