Cryptocurrency Scams Study

By The Better Business Bureau

CRIMINALS ARE FINDING NEW METHODS WITH THE CRYPTOCURRENCY MARKET, LIKE BITCOIN AND ETHEREUM, TO STEAL FROM UNSUSPECTING INVESTORS OR VICTIMS OF COMMON SCAMS. | Cryptocurrency Scams As Bitcoin and other types of cryptocurrencies gain attention in the news for their volatility, novelty and celebrity investors, scammers are quickly discovering how to use people’s lack of knowledge about the system to rip off investors and dress up old scams. Early entrants into the market made enormous amounts of money, and later others rushed in with hopes of similar gains. The total value of all bitcoins in the world is estimated at $1.03 trillion. A single bitcoin, worth $2,000 in 2017, reached an all-time high of $67,549 in 2021. But Bitcoin is volatile, and the value can swing wildly. After hitting a high in 2021, it declined to $35,484 in early 2022. Purchasing power of a bitcoin can vary day-to-day. Nonetheless, cryptocurrency — a digital payment system that does not rely on banks to verify transactions — has now grown into a major worldwide industry. New York, Arkansas, Brazil, and Puerto Rico expressed interest in becoming attractive locations for the cryptocurrency industry. However, in the spring of 2021 China banned cryptocurrency. It was the second largest country using cryptocurrency. A virtual tug of war exists between the legitimate and fraudulent use of cryptocurrency. This study examines digital currencies and the scams that use them. It provides background on key terms and concepts, examines cryptocurrency’s susceptibility for large-scale scams, and notes the risks and provides tips for common investors and others using cryptocurrency as a payment method.

Washington, DC: BBB, 2022. 18p.