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Cryptocurrency scammers are utilizing social media to prey on their victims.
The Federal Trade Commission said cryptocurrency scams now far exceed any fraud. Here's how to protect yourself.
PHILADELPHIA (WPVI) — The value of cryptocurrency has plummeted so much that financial experts have dubbed it the "crypto winter."
But despite the chill, crypto scams continue to heat up, reaching record highs in the number of complaints.
The Federal Trade Commission said cryptocurrency scams now far exceed any fraud.
And the scammers are utilizing social media to prey on their victims including John who asked us to hide his identity due to the embarrassment.
"Never in my lifetime did I think that I would be a victim," he said.
John said he found an advertisement on Instagram to invest in Bitcoin Mining, an investing space about which he was curious.
"And they're very pushy, you know, and I didn't invest right away," he said.
John said he was baited by the slick and professional website called Safe Coin Miners, which our investigation traced back to Nigeria.
It claimed investment returns from 84% to over 100% mining for cryptocurrency.
Simply put, crypto mining is the process of using powerful computers to create new digital currency through encryption algorithms.
"They wanted me to send them $500 because $500 would make you $3,500. And I said, 'How's this possible?'" John recalled
It isn't. Yet he invested.
John said the next day his account showed a balance of $3,500, which was seven times his original investment.
"It was exactly like I hit the lottery," he said.
So John said after seeing that return on paper, he began sending more money.
But now it's all gone.
"I just got suckered," he said.
Emma Fletcher, a senior data researcher for the Federal Trade Commission, warns cryptocurrency and social media are a combustible combination for fraud.
"Promises of guaranteed huge returns, or claims that your cryptocurrency is going to be multiplied, those are always going to be scams," she said. "No cryptocurrency investment is ever going to be guaranteed."
Fletcher said since 2021, $575 million of all crypto fraud losses reported to her agency were about bogus investment opportunities, far more than any other fraud type.
Most involved paying in crypto, unlike John who paid cash.
"One in every $4 reported lost to fraud was lost in cryptocurrency, which is pretty astounding," Fletcher said.
John won't divulge exactly how much he lost but it's in the tens of thousands of dollars.
He said he only communicated via email and text with his alleged scammers.
John said he received a couple of checks to cash out as part of his investment but they bounced.
"We've even had people who, just to make sure it was real, do a small test withdrawal where they were able to initially get their money back a small amount," said Fletcher. "So then they doubled down and they keep putting in more money."
Our victim said his alleged scammers still try to communicate with him occasionally because they want $4,000 more to cash out his money.
They even showed him bundles of cash they say they'll ship to him for that fee.
"I'm not going to deal with these people anymore and I haven't given them an additional dime," he said.
John went to the police and they took a report, but like most of these cases — it went nowhere.
The FTC says he should report the fraud to them at: reportfraud.ftc.gov
John said he just wanted to warn others in hopes it prevents them from losing money and from embarrassment.
"I used to make fun of people that did this," he said.
The FTC also said these criminal networks are increasingly targeting dating sites to find victims for crypto scams.
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