FBI warns about new cryptocurrency scams using COVID-19

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The U.S. Federal Bureau of Investigation (FBI) has issued a warning about a rise in new cryptocurrency scams using COVID-19 to steal money from victims.

The coronavirus pandemic continues to wreak havoc across the world, disrupting lives and economies. Even criminals are feeling the pinch as Chainalysis reports that revenue for cryptocurrency scammers has dropped by a third due to the ongoing crisis.

However, criminals always seek to use a crisis as a means of opportunity. The FBI is warning that criminals are now using COVID-19 as a component of their cryptocurrency scams.

Cryptocurrency scam surge expected

In an official press release, the FBI believes that there will be an increase in crypto scams related to COVID-19 and warns the public to be on its guard.

The FBI lists four particular types of coronavirus-related scams that are expected to increase in frequency:

  • blackmail attempts
  • work-from-home scams
  • paying for non-existent treatments or equipment
  • investment scams

Blackmail attempts can take several forms, such as threatening to release a person’s porn-browsing history unless a payment in Bitcoin or other virtual currency is made.

The FBI notes a new COVID-19 twist in which the scammers threaten to release the victim’s personal information as well as infect them and/or their family with coronavirus unless a payment is made.

The work-from-home scam is a way to use the victim to launder stolen money via cryptocurrency. The scammers pose as an employer and offer to donate money – which has actually been stolen from others – to the victim, with the provision that the victim deposits the money into a cryptocurrency kiosk.

The non-existent treatments or equipment scam targets people who are seeking ways to deal with the COVID-19 outbreak. The scammers operate websites that offer products and treatments related to the coronavirus. Such websites take crypto as payment, but the wares being advertised do not exist.

Investment scams have been around forever, and there have been a few major ones in the cryptocurrency ecosystem. OneCoin is one notable example. The lure of making a large amount of money in a very short time with just a small investment is a potent one, even more so now as many people are out of work or facing reduced hours during the COVID-19 pandemic.

Protecting yourself

To protect yourself from cryptocurrency scams, the FBI recommends the following:

  • Verify that a vendor/charity is legitimate and accepts cryptocurrency before sending payments/donations.
  • Conduct extensive research on potential investment opportunities.
  • Do not use your personal bank accounts for work-from-home business-related activity or provide your bank account information to someone who is not named on the account.
  • Contact law enforcement before paying out blackmail and/or extortion attempts and before converting your money into cryptocurrency to pay them.

In such an uncertain time, it’s wise to exercise even more caution before handing money or cryptocurrency over to someone else. If something sounds too good to be true, it probably is.

You can report cryptocurrency scams to the FBI’s Internet Crime Complaint Center.

Images courtesy of Wikimedia Commons/FBI

Jeff Francis

Jeff has taken a roundabout way to becoming a cryptocurrency writer. He has always had a huge interest in history, which led to him receiving a degree in medieval history. He once thought of becoming a teacher but eventually joined some friends in opening a hobby shop. Jeff eventually took over sole proprietorship of the business and ran it for over 10 years. He then moved on to online selling and then into gaming journalism. He has spent the last 10 years writing professionally for various websites as well as creating content for many businesses. A few years back, he began hearing about Bitcoin and the rise of other cryptocurrencies. A proponent of allowing people to take economic power into their own hands, Jeff has enthusiastically supported cryptocurrencies, not to mention the many benefits of blockchain technology. This interest propelled him to becoming a writer for, and later editor of, several cryptocurrency-focused websites. Jeff is a lifelong geek and gamer. He tries to keep up with the slew of TV shows and movies that fall into the fantasy/sci-fi/superhero genres, and he still plays pen-and-paper role-playing games on the weekends. He lives in Florida, USA, as he cannot stand cold weather.

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