By: Katie Hand
Cryptocurrency has quickly gained popularity as a new way to invest, shop, and move money. While digital currencies like Bitcoin and Ethereum offer exciting opportunities, they’ve also opened the door for scammers to exploit unsuspecting users. Whether this is a new concept to you or you are already using crypto, it's important to recognize how these scams work and how to protect yourself. This information is based on guidance from the Federal Trade Commission, the Texas Bankers Association, and the United States Secret Service.
What Is Cryptocurrency?
Cryptocurrency is digital money that exists only online. You can buy it using your phone, computer, or a crypto ATM. Bitcoin and Ether are two of the most common, but thousands of other types exist, with new ones created regularly. You can purchase cryptocurrency through apps, websites, exchanges, and ATMs. Once you do, it’s important to understand the risks, especially when it comes to fraud.
Why Scammers Use Cryptocurrency
Unlike credit or debit cards, cryptocurrency transactions don’t come with the same legal protections. You can’t dispute a crypto payment, and once it’s sent, it usually can’t be reversed unless the recipient returns it voluntarily. Scammers like cryptocurrency because it is an instant payment and nearly impossible to trace.
Common Cryptocurrency Scams:
Impersonation Scams
Scammers may pretend to be from government agencies or utility companies, claiming you owe money or are under investigation. They pressure you to send crypto to a wallet address and may even guide you through using a crypto ATM. No legitimate organization will ever request cryptocurrency payments.
Romance and Investment Scams
A scammer may pose as a romantic interest online, eventually asking for money or offering assistance with cryptocurrency investments. If someone you’ve never met in person asks for cryptocurrency, it’s likely a scam. Any cryptocurrency you send to them will not be recoverable, regardless of the amount.
Fake Investment Offers
These scams promise high returns or insider tips. The pressure to act fast is part of the con. They will use stressful and urgent language to pressure you into acting fast. Once you send money, it’s gone. No legitimate investment guarantees profits.
Tech Support Scams
Scammers may claim there’s a virus on your computer and offer to fix it for you… for a crypto fee. Real tech companies won’t ask for crypto or contact you out of the blue. If you get a pop-up message on your computer, do not click on it. This can be an attempt to gain access to your computer and information.
Financial Safety Scams
Some scammers claim your bank account is at risk and instruct you to transfer funds to cryptocurrency for safekeeping. They may stay on the phone and direct you step-by-step. This is always a scam. Once you make a deposit into a crypto ATM, your money is gone immediately. Do NOT make a deposit if you have been directed to do so by someone you do not personally know.
How to Stay Safe
• Never send cryptocurrency to anyone you don’t personally know or trust
• Research companies and individuals before making payments
• Be wary if cryptocurrency is the only payment option
• Don’t let anyone rush you into making quick decisions
• If something feels off, take time to verify it or ask for help
Cryptocurrency has real potential, but also real and irreversible risks. Scammers are adapting quickly and using trusted brands, urgent language, and new technologies to steal from people. Knowing the warning signs is your best defense against scammers.
If you believe your personal and/or financial information has been compromised, contact City Bank immediately at (800) 687-2265.
