Romance scams targeting younger adults are increasingly using cryptocurrency as part of the scam. National Cyber Security Center, sextortion scams often request individuals to pay in Bitcoin and other cryptocurrencies. Indeed, Bitcoin has become the most common currency requested in ransomware cases, being demanded in close to 98% of cases. Crypto, on the other hand, can be purchased from anywhere at any time. However, such payment methods do require potential victims to leave their homes, where they might encounter a third party who can intervene and possibly stop them. In the recent past, scammers would request wire transfers or gift cards to receive money – as they are irreversible, anonymous and untraceable. Scammers are simply capitalizing on the anonymous nature of cryptocurrencies to hide their identities and evade consequences.
These include ransomware cases, romance scams, computer repair scams, sextortion cases, Ponzi schemes and the like. All ages and demographics can be targets. The second basic type of cryptocurrency scam simply uses cryptocurrency as the payment method to transfer funds from victims to scammers. The SQUID website was also riddled with grammatical errors, which is typical of many scams. In the SQUID case, one warning sign was that investors who had bought the coins were unable to sell them. The pandemic also caused a disruption to mainstream business, leading to greater reliance on alternatives such as cryptocurrencies. Scammers capitalized on their popularity. But they have expanded to capture the minds and pockets of everyday people and criminals alike, especially during the COVID-19 pandemic, when the price of various cryptocurrencies shot up and cryptocurrencies became more mainstream. The internet and other technologies have simply changed the rules of the game, with cryptocurrencies coming to epitomize the leading edge of these new cybercrime opportunities.Ĭryptocurrencies – which are decentralized, digital currencies that use cryptography to create anonymous transactions – were originally driven by “ cypherpunks,” individuals concerned with privacy. What has fundamentally changed is the ease by which scammers can reach millions, if not billions, of individuals with a press of a button. Scams are not a recent phenomenon, with stories about them dating back to biblical times. And there are steps you can take to reduce your chances of becoming a victim.
There are reasons why cryptocurrency scams are so prevalent. We study behavioral economics and psychology – and recently published a book about the rising problem of fraud, scams and financial abuse. As the number of people owning cryptocurrencies has increased, so has the number of scam victims. Currently there are hundreds of millions of cryptocurrency owners, with estimates predicting further rapid growth.
This student, unfortunately, is not alone. The experience was financially and psychologically traumatic, to say the least. The student had become a victim of a cryptocurrency scam and had lost all their money – including a bank loan – leaving them not just broke, but in debt. ( The Conversation) – When one of our students told us they were going to drop out of college in August 2021, it wasn’t the first time we’d heard of someone ending their studies prematurely.
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