Are You a Victim of Cryptocurrency Fraud?

Steps You Can Take to Respond to Cryptocurrency Scams

Scams and fraud related to cryptocurrency are becoming more and more common. While there may be some legal steps that can be taken to address losses due to cryptocurrency fraud, the best thing to do in these situations is to contact law enforcement.

Cryptocurrency fraud can be reported to the FBI at www.ic3.gov. The Federal Trade Commission (FTC) also tracks fraud schemes, and reports of fraud can be made at ReportFraud.ftc.gov. If you have been affected by scams or have lost money due to fraud, we encourage you to reach out to the authorities to report these issues and learn how they can help you.

Understanding Cryptocurrency Fraud

Scams related to cryptocurrency can take many forms, including:

• After depositing funds in a cryptocurrency exchange, you may be asked to send additional money in order to make a withdrawal. This is a scam, and no legitimate exchange will require payments before withdrawals can be made.
• People who demand payments in cryptocurrency are usually scammers. These cases may involve "ransomware," which are viruses or other programs that lock up computer systems or accounts and demand payment in cryptocurrency before access will be restored.
• Investment scams may promise large returns with low or zero risk, but even if cryptocurrencies involved in these cases seem legitimate, their value may be manipulated to funnel funds to scammers.
• "Phishing" scams may be used to obtain personal information and commit identity theft. Scammers may claim to be involved with cryptocurrency exchanges, or they may impersonate government organizations such as the IRS. When information such as Social Security numbers, bank account details, or credit cards are entered into fake websites, scammers may then use it to access accounts and steal money or cryptocurrency.

Can Spencer & Associates Help Me Address Losses From Cryptocurrency Scams?

Unfortunately, our firm has found that there is little we can do to help victims of cryptocurrency fraud. We are limited to handling cases in the United States, and the majority of these schemes are perpetrated by people who are located in foreign countries. Cryptocurrencies or other assets stolen through scams are often immediately moved overseas, putting them out of our reach.

As mentioned above, your best recourse in these situations is to contact law enforcement. Local or state police may provide some assistance, but federal agencies will be more likely to be able to address these concerns more effectively. The FBI has provided some guidance for victims of cryptocurrency scams. The FTC has also provided some information about common scams and how to report fraud.