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Beware Cryptocurrency Scams

Consumers should be wary of cryptocurrency scams.

You have probably heard of cryptocurrency, a trendy new way of investing your money. But how safe are these investments, and how do you protect yourself from cryptocurrency fraud? This page explains cryptocurrency and provides tips on how to avoid getting scammed.

Cryptocurrency is a digital asset that uses encrypted networks to execute, verify, and record transactions without the involvement of a centralized authority, like a bank or government. Cryptocurrency can be purchased through an exchange or from a kiosk/ATM. While Bitcoin, the most well-known cryptocurrency, may be accepted as payment at some stores, cryptocurrency is generally not accepted in exchange for goods and services.

Consumers should be cautious of investing in cryptocurrency, which is highly volatile and largely unregulated. Additionally, criminals employ a variety of scams involving cryptocurrency.

Avoiding Cryptocurrency Scams:

  • Don’t respond to personal solicitations involving cryptocurrency from an unknown source (e.g., through messages on WhatsApp, Signal, Telegram, Facebook, email, text, etc.).
  • Don’t send cryptocurrency to someone you haven’t met in person; even if you have met them, be wary.
  • Verify all requests for payment of a debt independently. If a caller claims to be from a company or government agency, hang up and call the published customer service phone number of the company or agency. No legitimate entity will demand payment by cryptocurrency or promise you a reward for paying in cryptocurrency.
  • Understand that if a cryptocurrency investment seems too good to be true, it probably is.
  • Be aware that you will not be able to reverse a cryptocurrency transaction and get your money back.
  • Don’t invest money you’re not prepared to lose.

Learn about the types of cryptocurrency scams the Attorney General’s Office commonly sees, how to avoid them, and what to do if you fall victim to one.

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Romance Scams & “Pig-Butchering” Operations

In romance scams, the scammer forms a romantic relationship with the victim, typically through dating or social media apps. These relationships often develop extremely quickly, with the scammer professing love early in the relationship. Scammers use various manipulative techniques to build trust. Once the scammer has developed a hold on the victim, they claim to need money for any number of reasons, including to visit the victim, assist a sick family member, or help with another financial hardship. The scammer claims they need the funds urgently, convinces the victim to send funds using cryptocurrency, and upon receiving them, is never heard from again.

In pig butchering scams, victims are approached on dating, social media, or messaging apps and lured into making larger and larger investments. The term “pig-butchering” is based on the practice of fattening a hog before slaughter. At first, the scammer will make sure to post what looks like a gain on the investment. The scammer may even allow the victim to withdraw money once or twice to convince them the investment is safe and induce them to invest more additional funds—sometimes hundreds of thousands of dollars. At that point, the victim’s funds have been stolen by the scammer. The victim’s pleas for the return of their funds result only in demands for more money, often in fabricated taxes and fees.

How to Spot and Avoid a Romance or “Pig-Butchering” Scam:

  • Tell the person that you don’t have any money to invest right now; if they disappear, they were probably trying to scam you.
  • Relationships that develop quickly are a scam warning sign, especially if the person asks for money or refuses to video chat.
  • Try using a reverse image search to see if the person is using someone else’s photo.
  • If you’re asked to pay taxes and fees to withdraw your money, it is likely a scam.
  • Use extreme caution when considering large cryptocurrency investments.
  • If an investment seems too good to be true, it probably is.

Impersonation Scams

In an impersonation scam, scammers pose as law enforcement, the IRS, pension agencies, utility companies, established businesses, financial institutions, or similar organizations. Under these guises, scammers create a false sense of urgency by claiming that the victim needs to settle debts (e.g., pay taxes or an outstanding bill). The scammers often threaten their victims with imprisonment or other penalties unless the victims pay the debt by sending cryptocurrency purchased at a cryptocurrency kiosk. A cryptocurrency kiosk (also referred to as a “crypto ATM”) is a physical machine that enables you to convert cash to cryptocurrency and send it to yourself or other people.

How to Spot and Avoid an Impersonation Scam:

  • Remember, no company, government agency, or other entity will demand payment in cryptocurrency.
  • If someone tells you that the only accepted payment method is cryptocurrency, they are almost certainly a scammer.
  • If you get a call from someone who claims you owe a debt, contact the published customer service phone number of the agency or business to confirm the identity of the caller and whether there is in fact an outstanding debt.
  • It’s risky to send cryptocurrency using a kiosk and can be expensive. Think twice before doing it.

Investment Manager Schemes & Initial Coin Offerings

In investment manager schemes, scammers contact potential investors claiming to be successful “investment managers.” These scammers often purport to represent well-known cryptocurrency exchanges or cryptocurrency mining enterprises. Many of them claim to have made millions from successful cryptocurrency investments and promise high returns on the victim’s investment. Typically, they set up sophisticated and official looking websites. However, once a victim transfers their funds to the “investment manager” through one of these websites, they often find the money can’t be withdrawn or that withdrawals are subject to large fees.

Initial Coin Offerings (“ICOs”) are the cryptocurrency equivalent of an initial public offering for stocks. Investors in an ICO are invited to buy a new cryptocurrency from, or get a stake in, a company representing a project. This, on its face, is not necessarily a scam. However, scammers may use ICOs as an opportunity.

One type of ICO scam, commonly referred to as a “pump and dump” scheme, involves a scammer convincing many people to invest in an ICO to drive up the price of the coin. The scammer then quickly sells off all their own holdings, thereby destroying the value of the coin and leaving the rest of the investors with nothing.

Investing in a new coin is inherently risky as most coins have no real value. Investment fraud involving cryptocurrency, such as ICOs, rose by nearly 200% from $907 million in 2021 to $2.57 billion in 2022, according to the FBI’s annual Internet Crime Report.

How to Spot and Avoid an Investment Manager or ICO Scam:

  • Avoid people who offer to help you invest in cryptocurrency, especially if they claim high or guaranteed returns.
  • Do your own research using trustworthy sources before investing your money, and don’t be rushed into making an investment.
  • Run a general search to check whether there is another exchange or cryptocurrency with the same name to avoid investments through a fake copycat exchange or in a fake copycat cryptocurrency.
  • Don’t invest money you’re unwilling to lose.
  • Is there a whitepaper? A whitepaper should explain how the cryptocurrency has been designed and how it works.
  • Look online to see if the project has been flagged as a scam. But be wary of interacting with people who claim to be victims. They may be part of a larger scam and try to steal from you in other ways.
  • If an investment looks too good to be true, it probably is.

What to Do If You Are a Victim of a Cryptocurrency Scam

  • Report the crime to your local police department.
  • File a report with the FBI.
    • Make sure to include your wallet address (the digital address where you store your cryptocurrency), the scammer’s wallet address, and the transaction hash for each transaction.
    • If you need help filing a report, our Office can assist you. File a complaint for assistance.
  • If you live in Massachusetts and sent cryptocurrency to the scammers while in Massachusetts, file a complaint with our Office. We may be able to help you trace the stolen funds using blockchain analytics. Complaints also help our Office and other law enforcement agencies identify and shut down scam websites, preventing others from falling victim to the same scam.

What Not to Do If You Are a Victim of a Cryptocurrency Scam

If you recently lost money to a cryptocurrency scam, you may be tempted to hire a third-party tracing company. Tracing companies may claim they can recover stolen funds. However, hiring a tracing company often leads to more fraud and more lost money.

  • Scammers often create websites posing as fraud recovery investigators. These websites claim to have excellent reviews or impressive recovery rates. They typically charge high upfront fees and promise the return of stolen funds. However, instead of recovering your money, these fraudsters will either use your personal information for future scams or provide you with a trace of your stolen funds using questionable blockchain analytics. It is much safer to work with law enforcement agencies, such as your state attorney general’s office, the FBI, or your local police.
  • Even if a tracing company is legitimate, it does not have the same authority as law enforcement agencies to compel the freezing or seizure of cryptocurrency assets.

Cryptocurrency Scam Tracker

Our Office, along with other law enforcement agencies, takes action to disable cryptocurrency scam websites. In some cases, these websites are hosted by companies outside the U.S., which refuse to take the websites down. Even when websites are disabled, scammers sometimes create new websites under different domains.

Below is a list of cryptocurrency scams identified by our Office. Please be aware, this list only includes scam websites known to our Office. If you have sent money to or invested in crypto through a suspicious website not included on this list, please notify us by submitting a complaint. 

  • CreditCoin, https://mobile.creditcoin.cc/#/
  • Stakesecured, www.stakesecured.com 
  • WealthForceLLC, https://mine.wealth-frontllc.com/login; www.wealthfrontllc.com
  • BEC Investment, https://becinvestment.co
  • DMD567, https://dmd567.com
  • Maxes, www.maxes-q.com/wap
  • Debiex, https://debiex.net/wap/#/
  • Novatechfx, https://novatechfx.com
  • Bitcenter, https://bitcenter-us.com
  • Bit-Virgo, https://web-virgo, https://virgo-ether.com
  • CoinURS, https://coinurs.com/
  • Starlink , https://starlink-web3.com/index
  • Coinbase Decentralized Finance (DeFiWeb3), https://defiweb3-eth.com/#/
  • Bitprimefx, http://ww38.bitprimefx.com/
  • HFTMeats, https://hftmeats.com/
  • FXT, https://h5.fxtcoin.com/#/pages/base/index
  • Coin Asset Corp, https://coinassetcorp.com
  • Expert Invest Coin, https://www.expertinvestcoin.com/
  • CoinFred, www.coinfred.com
  • BitFreds, www.bitfreds.com
  • Coin-Rilon, www.coin-rilon.com
  • Circular Economy Group , https://cegamas.com/; cegapes.com
  • Eamom, https://eamomex.com/
  • IMTokenPro, https://imtokentrade.com; https://imtokenbe.com; https://doublecauto.com
  • bitmegaoptions.net, https://bitmegaoptions.net
  • ACME, https://m.acme.site/
  • BTCBOXOHN, www.btcboxohn.com
  • Finaclefx, www.finaclefx.com
  • AIPU, https://aipufx.com/
  • Mercatoxep, https://mercatoxep.com
  • Doexlub, https://doexlub.com/#/home
  • Quest Option, questoption.com
  • PBEX, https://pbexidn.com/#/home; https://pbexrac.com
  • BTCBOX, https://www.btcoin-box.com/p/pc
  • edx-maketswq, www.edx-maketswq.com
  • Bitmart-Trades / Bitmart-Trans, https://www.bitmart-trades.com/h5/#/ ; https://bitmart-trans.com/h5/#/
  • Cryptonity, https://www.cryptonity.com
  • Gemini-Tangskt, www.gemini-tangskt.top
  • Stock Marketing , https://bitmegatraders.com/
  • Trust Futures, https://trustfuturesencrypt.com/#/
  • Channel Traders Vendors, https://www.channeltradersvendor.com/
  • BitoPro, https://bitopro-ca.com
  • BITCP, https://www.bitcp.com/#/
  • Stake Orio, www.stakeorio.com
  • QJEX:EX, https://apps.apple.com/us/app/qjexm-ex/id6449367482
  • Esteem Options, https://esteemoptions.io
  • Nexoprotrading, https://iqtradingplatform.com/, nexoprotrading.com
  • EKM, www.ekmboost.cc
  • GS Partners, https://gsp.gold/
  • Tau Limited, https://m.taulimited.cc/#/
  • BMF.com, https://globalbmf.com/home/en.html
  • Online Mobile Actions, www.onlinesmobileactions.cc
  • "Fidelity International", https://coin-crypto.top/
  • B.E.Kxpro Foundation (Bekxpro), www.bekxpro.com
  • FuturesFX , www.futurefx.com
  • NovaTech FX, www.novatechfx.com
  • Dopexpro, https://dopexpro.com/
  • Bakkt, www.bktdf.com
  • IOE Investment Advisors Ltd, https://www.ioe1.com/
  • WeOwnCoin Incorported Ltd, https://h5.weowncoinai.vip
  • Metrotradeanalysis, https://metrotradeanalysis.com/
  • XploitFX Trade, https://xploitfxtrade.com/signin.php.
  • Patagonia Trade, https://patagonia-trade24.finance, https://patagonia24.site, https://bdsaqwe.ha-cloud, https://coinpost.finance, https://GC-GI.com, https://patagonia24.online, https://patagoinia-tradde.com, https://patagonia-trade.finance
  • SBT Investments (Spirebit), www.spirebit.com
  • Blammo, Accessed through MyTrading app
  • General Investments, Accessed through MyTrading app
  • BitProject, Accessed through MyTrading app
  • Eagle Trading, Accessed through MyTrading app
  • Inevitrade, www.inevitrade.com
  • AlphaFX Trading, www.alphafx-trading.com

Key Terms

Cryptocurrency Wallet: A cryptocurrency wallet is a device or program that stores your cryptocurrency keys and allows you to access your coins.

Cryptocurrency Key: Each cryptocurrency wallet will have a public key and a private key. The public key is a set of digital information that works like an address. Having the public key enables someone to send the wallet owner cryptocurrency. The private key is essentially a password for the wallet. When someone has the private key, they can remove cryptocurrency from the wallet.

Tracing Companies: Tracing companies claim that they can investigate the movement of your stolen cryptocurrency and then initiate recovery efforts and/or litigation.

Cryptocurrency exchange: Cryptocurrency exchanges work similarly to a broker, giving you the tools to buy and sell cryptocurrencies in exchange for cash and exchange one cryptocurrency into another. They generally charge commissions or fees for that service. 

Initial Public Offering or “IPO”: IPO is the process of offering shares of a private corporation to the public in a new stock issuance for the first time. An IPO allows a company to raise equity capital from public investors.

Bitcoin: Bitcoin (BTC) is the original cryptocurrency. It is solely computer code, there is no physical manifestation of this coin. People can buy and sell bitcoins and those transactions are recorded on a digital ledger called “blockchain.” People also obtain Bitcoin by using their computers to complete complex math problems which verify transactions on the blockchain in a process called “mining.”

Blockchain: A blockchain is a digital ledger of transactions which is updated through a process where multiple computers agree a transaction is valid. The transactions are grouped into “blocks,” and each “block” is linked to the previous “block,” creating a “blockchain.” Most blockchains are public, meaning tools can be used to review all transactions.

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