BALTIMORE – As Bitcoin skyrockets, so do scams. The Federal Trade Commission has received reports of losses of more than $ 80 million in seven months due to cryptocurrency scams.
During the same period, the price of a Bitcoin more than doubled from $ 13,000 to over $ 35,000. In one year, it has more than quadrupled, now exceeding $ 60,000. And it is these price hikes that are causing more and more people to invest money in cryptocurrency.
“It’s kind of a lottery, hey, somebody’s won millions of dollars. Maybe if I play, I’ll win too, ”said Angie Barnett, president and CEO of the Better Business Bureau serving Greater Maryland.
This bet does not pay off for everyone.
The BBB is constantly receiving complaints about the cryptocurrency, most notably from Sherrett Jacobs, who got an Instagram message to start investing through a company called FX-Switchtrade.
“I was like, hey, we’re going to start with $ 100, $ 100, that’s not bad,” Jacobs said.
She received instructions to create an account on their website.
“They said to start trading on my behalf I had to give them an additional $ 200,” Jacobs said.
She sent the company a total of $ 300 in Bitcoin, then saw her investment take off. It quickly rose to over $ 800, over $ 3,000, over $ 5,000 and peaked at $ 9,500.
“He never went down. It only increased in three days. They said this would be my trading session and at the end of the three days I would be able to withdraw those funds, ”Jacobs said.
But first, she was told she would have to pay a one-time fee of $ 1,500, and she did so through Bitcoin.
“I received an email from their ‘customer service’ that in order for the withdrawal to be processed, I had to pay the IRS a fee of $ 2,500,” Jacobs said.
She then called her brother, another cryptocurrency investor, who confirmed that his income on the platform did not match the market.
During these three days, the value of Bitcoin fell. If his initial investment of $ 300 had been invested in Bitcoin, it would have been worth around $ 287.
“Guess I’m a rookie and don’t really understand how cryptocurrency really works, all I’ve seen is my investment goes up in increments and like wow,” Jacobs said.
The company did not respond to WMAR-2 News Mallory Sofastaiiemails or chats from. Their phone number is supposed to be reserved for VIP customers.
“There are no legal protections,” Barnett said. “Once you’ve sent cryptocurrency to whatever that destination is, you can’t reverse it most of the time.”
Cryptocurrency is also not backed by a government, so if you are considering investing in it, educate yourself first.
The FTC has provided the advice below:
- Promises of guaranteed huge returns or claims that your cryptocurrency will be multiplied are always scams.
- The cryptocurrency itself is the investment. You earn money if you are lucky enough to sell it for more than what you paid for. Period. Don’t trust people who say they know a better way.
- If a caller, love interest, organization, or anyone else insists on cryptocurrency, you can bet it is a scam.