Denver, CO

FBI Denver warns of increase in crypto scams

Heather Willard

Heather Willard / NewsBreak Denver / Feb. 3, 2023

(Denver, Colo.) The Denver Division of the FBI warns the public that crypto's increasing presence in daily life puts more people in danger due to crypto-related scams and urges people to stay vigilant and take precautions when dealing with cryptocurrency.

Denver investigators reported an emerging trend in which older adults fall for crypto investment scams, especially involving Tether (USDT) and USD Coin (USDC).

The investigators are seeing common scenarios where victims are presented with an investment opportunity by a scammer through social media, dating apps, or discussion forums. The scammer directs victims to use a link or phone number controlled by the fraudster on a fictitious support site. Once the victim transfers the funds, the fraudster disappears with the money.

Most reported crypto fraud losses that begin on social media are investment scams, the FBI reports. The Federal Trade Commission reported more than 46,000 people reported losing funds to crypto scams. The median amount lost was $2,600, but many lost far more.

In 2021, Coloradans reported losing almost $25 million to investment scams, according to the FBI’s Internet Crime Complaint Center. Coloradans 60 and older lost more money to scams than any other age group.

One couple in their late 40s, living in Parker, reported listing approximately $1.2 million in a Tether investment fraud scheme, and a 52-year-old Aurora man lost approximately $600,000 in a Tether investment fraud scheme. The FBI Denver also reported a 61-year-old Denver woman lost approximately $1.3 million in a Tether investment fraud scheme, and a 62-year-old Evergreen man reported losing $350,000 in a similar scheme.

“As more people use and invest in cryptocurrency, the more crypto scams we see,” said Mark Michalek, Denver FBI Special Agent in Charge. “The FBI will investigate allegations of crypto scams, but the best path is not to fall victim in the first place. FBI Denver wants people to be aware of the warning signs and be alert to the ways fraudsters try to reel them in.”

Cryptocurrency investment scammers often promise victims can “make lots of money” with “zero risk.” The criminals sometimes initiate a conversation through an unexpected text, email, or call.

Tether and USD Coin are tied to the U.S. dollar, which should raise additional red flags for anyone given an investment pitch into these cryptocurrencies.

FBI Denver is seeing two major cons when it comes to cryptocurrency fraud:

  1. A so-called “investment manager” contacts you. They promise to grow your money if you buy cryptocurrency and transfer it into their online account. The investment website looks real by imitating real websites. If you log in to your “investment account,” you won’t be able to withdraw your money at all, or only if you pay high fees.
  2. An online “love interest” wants you to send money or cryptocurrency to help you invest. The advice and offers to help you invest in cryptocurrency are nothing but scams. If you send them crypto, or money of any kind, it’ll be gone, and you typically won’t get it back.

Here are some tips to protect against cryptocurrency investment fraud (compiled from FBI Denver, the FBI Internet Crime Complaint Center and FTC):

  • Scammers guarantee you’ll make money or promise big payouts, but nobody can make those guarantees. There’s nothing “low risk” about cryptocurrency investments. If an investment opportunity sounds too good to be true, it likely is. Be cautious of get-rich-quick schemes.
  • Scammers make big claims without details or explanations. No matter what the investment, find out how it works and ask questions about where your money is going. Honest investment managers or advisors want to share that information and will back it up with details.
  • Before investing in crypto, search online for the name of the company or person and the cryptocurrency name, plus words like “review,” “scam,” or “complaint.”
  • Avoid using a provided link or QR code.
  • If you are asked to use a new app, download it via your usual app store, not from a provided link.
  • Resist pressure to act quickly.

Anyone who believes they may be a victim of cryptocurrency investment fraud can file a complaint at ic3.go, report cryptocurrency fraud to the exchange company used to send the money, and maintain all original documentation relating to the communication and financial transaction.

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Public safety reporter in DougCo, Denver metro. Previously: Pueblo Chieftain public safety reporter, Athens Messenger associate editor. Caffeine fiend, cat mom and lover of all things spooky.

Broomfield, CO

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