Luis Pazos 
Have you ever gotten one of those emails from a "Nigerian prince" promising you a huge inheritance? All you had to do was hand over your bank details, Social Security number, and a few thousand bucks to claim it. Sounds fishy, right? Of course, it’s an obvious scam. You don’t know any Nigerian princes, and anyone wanting to give you millions probably wouldn’t email your old Hotmail account.
The reality is, these scams sometimes work, which is why scammers persist. The Federal Trade Commission (FTC) said they got 2.1 million fraud reports from consumers in 2020. The most common scams were “imposter scams,” where the scammer pretends to be someone else. Consumers lost over $3.3 billion to fraud in 2020, a huge jump from $1.8 billion in 2019.
Cryptocurrency Scams on the Rise
Cryptocurrencies are becoming more popular, and because they’re harder to trace than traditional bank transfers, crypto scams are increasing. The FTC reported that nearly 7,000 people lost $80 million to crypto scams from October 2020 through May 2021. The median loss was $1,900.
Think it can’t happen to you? Think again. Crypto scammers are clever and know exactly how to gain your trust. I interviewed someone on my podcast who fell for a crypto scam, and his story was surprising.
Crypto Scams: A True Story
For privacy, we’ll call the person I interviewed “John.” John was somewhat into investing and met a girl on a dating app who was into crypto investing. She convinced John to start investing with her through websites like Binance.com and a lesser-known one called “Bitlont.”
John started with small amounts, moving crypto from Coinbase to Binance and Bitlont. Everything seemed fine initially. Bitlont had features allowing him to watch other traders in real-time, and their customer service appeared flawless.
Over time, John got more comfortable and started transferring money back into his bank account through Binance. Then, the girl suggested investing $5,000 per month into a Bitlont membership, claiming it guaranteed daily profits. She upped the stakes, suggesting he invest $10,000 per month for even higher profits.
John began using his credit card to invest more. But when the girl started pressuring him to invest more before the month ended, things didn’t add up. After questioning her and researching Bitlont, John found many red flags—like conflicting information about the company’s age.
Fed up, John tried to cash out. Bitlont then claimed his account had suspicious activity and demanded another $1,500 to release his funds. In the end, John lost all his assets on Bitlont, and the website and the girl vanished. Thankfully, some of his money was still on Binance, or his losses could have been worse.
Other Crypto Scams to Watch Out For
John’s story isn’t unique. The FTC says scammers often pose as crypto enthusiasts and use long-distance romance to gain trust and reel people into crypto scams. About 20% of those who lost money in financial scams were drawn in through a romantic facade.
Even trusted industry professionals can scam you. For instance, a crypto hedge fund manager confessed to lying about returns and scamming investors out of millions.
Here are some common crypto scams to be wary of:
- Celebrity Endorsements: Scammers use celebrity names to lend credibility to their schemes.
- Job Offer Scams: Fake job offers that ask for your banking details under the guise of crypto payments.
- Blackmail Emails: Threatening emails demanding crypto payments not to release sensitive info.
- Social Media Scams: Messages from celebrities or acquaintances asking for cryptocurrency—always a scam.
- Giveaway Scams: Promises to "double" or "triple" your crypto if you send them to a scammer’s wallet.
The Bottom Line: Crypto Scams to Watch Out For
If something seems too good to be true, it probably is. John learned this too late, but it’s a lesson we can all take to heart. Crypto scams are on the rise. To stay safe, be skeptical of offers that promise the world but might leave you with empty pockets.
