Cryptocurrency is a type of digital currency that you can use to buy goods or services
or to invest.
You use regular currency – such as the U.S. dollar – to buy these cryptocurrencies,
some of which are called tokens, and then you can spend with vendors that accept them.
There are thousands of different kinds of cryptocurrencies traded publicly.
They are not yet fully regulated and are unsecured unlike the money in your traditional bank account.
Blockchain is a digital ledger that tracks cryptocurrency transactions.
Cryptocurrency transactions are processed in blocks, which are then added to the chain,
hence the term blockchain.
That ledger is maintained across many different computers around the world, which means the
ledger is decentralized.
This is one of the ways the blockchain works to keep the transactions secure.
A “digital wallet” is the app or device where you can store your cryptocurrency.
There is a “public key” – basically the address you can give to someone to send
you a payment.
The “private key” is a very long string of letters and numbers.
It acts as your password because you need it to access a wallet and remove currency.
Cryptocurrency itself is perfectly legal to buy and use in the U.S.
In fact, many mainstream companies are now accepting cryptocurrency for goods and services.
What we are seeing, though, is an increase in bad actors who are using old style scams
to steal this new-style virtual asset.
Any kind of traditional scam can take on a cryptocurrency twist.
For instance, an extortionist contacts you to threaten you with the release of compromising
photos.
He demands that you send cryptocurrency.
Same old scam, new way to pay.
We also see cryptocurrency frequently used in romance scams.
For instance, the victim is persuaded by the suspect to take cash from their bank account
and put it into cryptocurrency ATM kiosks.
Once cryptocurrency is purchased it is sent to the suspect.
It is a fast and easy way to send cryptocurrency across international borders.
From the investment side we often see victims promised fast and high returns on their investments.
If an opportunity sounds too good to be true, it very likely is too good to be true.
If someone is promising you fast returns on your investment, it is most often a scam.
First, recognize that a cryptocurrency investment is like any other investment – it can go
up or down.
Buyer beware!
When it comes to fraudsters, though, there are some specific steps you can take:
Do your research.
Look for reputable sources to explain how to buy it, how to trade it, and how to use
it.
Don’t respond to unsolicited offers or click on links you may receive through email, texts,
or social media; and Never share your private key or seed phrase
with anyone.
That private key or seed phrase is all that is standing between you and someone trying
to take your money.
Cryptocurrencies experienced an enormous growth over the last five years.
A lot of that growth has plateaued, but it appears the general public is trying to recreate
that price boom so individuals can get rich with enormous and fast returns on investment.
If you are the victim of a cryptocurrency or other type of cyber scam, make sure you
report it to the FBI right away through our Internet Crime Complaint Center.
Go to www.ic3.gov to submit that information.