Protecting your assets when using Bitcoin

NORFOLK, Va. – People are always looking for a way to make their money grow and cryptocurrency is getting more popular for investing.

It’s most popularly known as Bitcoin, which is a digital payment system that doesn’t rely on banks to verify transactions.

If you’re not careful, you can fall into trouble because as hard as you’re working to keep money in your wallet, criminals are doing just the same to steal it.

Criminals are getting savvier because crypto operates outside of the traditional banking system, and it’s not regulated, so you don’t have the same protections.

The Better Business Bureau has a Scam Tracker to keep track of any local cases. A person from Virginia Beach recently lost more than $400 by falling for a message they received through Instagram.

Needless to say, the person on the other end was not the investor they claimed to be.

Barry Moore, the President and CEO of the Better Business Bureau serving Central Virginia, said the number of people who have been taken advantage of by using Bitcoin has tripled in the past three years, jumping from number seven on the FTC’s list to number two.

“If it’s that easy in one year to move seven to two, let’s assume [these crimes have] the ability to go to number one,” said Barry Moore.

In 2020, the FBI reports receiving more than 35,000 complaints where people used cryptocurrency and then lost it. The losses accounted for more than $750 million.

Moore said once the money is gone there’s a very small chance that you will never get it back. He added because there is so much money in the relatively anonymous and unregulated system, it’s easy for people to fall victim.

“I think for people to protect themselves [they should] decide if it’s discretionary income they’re going to spend on this or it’s their hard-earned money or their investment money that they’re going to need someday for retirement or kids tuition. Because it might be gone,” he said.

To avoid falling victim, the BBB said to do the following:

  • Guard your wallet. If you buy cryptocurrency, the security of the wallet is of prime importance. If you lose the key, then your funds are gone permanently.
  • Look carefully at email addresses and website addresses. Phishing scams often try to trick people into logging in and then capture the log in credentials. Those then can be used to steal money. Looking for an exchange with an internet search engine may lead to fake sites which advertise and impersonate real companies. Be especially careful when viewing these on a phone.
  • Do not pay for products with cryptocurrency. Be careful if someone asks you to pay with Bitcoin or another cryptocurrency. No one with the government will ever ask for this form of payment.
  • Beware of fake recovery companies. Scam companies sometimes claim that they can recover stolen money – for a fee. These are usually scammers.
  • Watch out for fake reviews. Scammers often create fake reviews for their own companies.
  • Be wary of celebrity endorsements. It can be tempting to rely on a prominent figure who has invested in cryptocurrency. But those endorsements are often not authorized and even if they are, the celebrity may be paid for the effort and may not know more about it than you do.
  • Be careful about claims made on social media. This is the most common place for people to encounter investment scams.
  • Be wary of “friends” who reach out to you on social media and tell you how they made money with cryptocurrency. Accounts are frequently compromised. Call your friend by phone to see if it is really them.
  • Only download apps from Google Play or the App Store. Trusted app stores do not eliminate the threat of app scams, but they do offer a basic level of protection. Be careful with apps. Some contain malicious software.
  • Do not believe promises of guaranteed returns. No one can guarantee how an investment will perform.
  • Seek help and support. Cybercrime Support Network offers a free, confidential support program for romance scam survivors.

According to the BBB, here’s how you can report an incident or register a complaint:

  • Better Business Bureau — file a complaint with your local BBB at BBB.org if you lost money or report a scam online at BBB.org/scamtracker.
  • Federal Trade Commission (FTC) — file a complaint online at reportfraud.ftc.gov or call 877-FTC-Help.
  • Internet Crime Complaint Center (IC3) — file a complaint online at ic3.gov/complaint and include:
    • All transaction IDs
    • Where you sent your crypto from (private wallet, account at exchange X, etc.)
    • Where you believed you were sending your funds (perpetrator’s private wallet, arbitrage account, etc.)
    • Any details regarding the scam and scammers.
  • Canadian Anti-Fraud Center — file a report online at antifraudcentre-centreantifraude.ca or call 1-888-495-8501.
  • US Securities and Exchange Commission — SEC.gov/tcr

Related: What is cryptocurrency, and should you invest?

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