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Blockchain technology created a secure environment for cryptocurrencies to flourish –
but that security doesn’t protect virtual money from scammers.
WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) released a bulletin highlighting complaints it received related to crypto-assets. While not a major influence in the housing market yet, more buyers and sellers are accepting cryptocurrency, such as Bitcoin, in real estate sales.
While the technology to create cryptocurrency is generally secure, human scammers and other criminals cause damage by targeting human cryptocurrency users.
According to CFPB, consumers most commonly reported being victimized by frauds, theft, account hacks and scams. They also had issues executing transactions and transferring assets between exchanges.
Many complaints claimed that the user had issues accessing funds in their account due to outright platform failures, identity verification issues, security holds, or due to technical issues with platforms. And poor customer service is a common theme in crypto-related complaints, FHFA says.
“Our analysis of consumer complaints suggests that bad actors are leveraging crypto-assets to perpetrate fraud on the public,” says CFPB Director Rohit Chopra. “Americans are also reporting transaction problems, frozen accounts and lost savings when it comes to crypto-assets.”
Chopra specifically warns crypto users to “be wary of anyone seeking upfront payment in crypto-assets, since this may be a scam.”
Crypto-assets are a private sector digital asset that depends primarily on cryptography and a distributed ledger (such as a blockchain) or similar technology. These assets are also commonly referred to as “virtual currencies,” “cryptocurrencies,” “crypto tokens,” “crypto coins,” or simply “crypto.”
Scammers often target crypto-assets since it can be difficult to determine the people behind many crypto-asset addresses – and scammers have used a number of techniques to obscure crypto-assets’ movement to other accounts. This makes it more difficult for regulators and law enforcement to trace stolen crypto-assets.
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