Senator Elizabeth Warren emphasized the growing danger of cryptocurrency scams targeting seniors. Steve Weisman, a cybersecurity expert, supported Warren’s proposed Digital Asset Anti-Money Laundering Act, aimed at curbing these scams.
Warren highlighted a shocking 350% surge in crypto investment scams targeting seniors, resulting in losses over $1 billion. The FBI reported that crypto scams led investment fraud in the United States in 2022, totaling $2.5 billion in stolen funds.
Weisman, Scamicide.com Editor and Bentley University Senior Lecturer, explained seniors’ susceptibility to crypto scams. He cited studies indicating a diminished skepticism in older age, making seniors more prone to fall for these scams, which often involve promises of high returns or fraudulent recovery offers.
The allure of crypto for fraudsters lies in its anonymity and speed, making it challenging to track and recover funds. Weisman detailed various scam methods, including ransom demands, fake investment platforms, and AI-enhanced frauds. The anonymity of cryptocurrencies and their use in mixers complicates the tracking of fraudulent activities.
Senator Warren’s bipartisan legislation, endorsed by AARP and supported by 14 other Senators, aims to equip financial regulators with tools to monitor and act against suspicious crypto activities. Weisman strongly endorsed the Act, stressing the need for updated laws to keep pace with technological advancements.
The media has highlighted the Act’s potential to significantly reduce crypto scams. The law would bring digital assets under the same Anti-Money Laundering regulations as traditional currencies. The recent rise in crypto-related breaches and scams underscores the urgency of this legislation.
Senator Warren, with increasing support from other senators, is pushing for prompt action against the rampant crypto crimes affecting the senior population. The bipartisan support for the Act signifies a united front against these growing financial threats.
Bitcoin of America, a Bitcoin technology firm, and three of its executives are facing charges of money laundering, conspiracy, and other crimes connected to the operation of more than 50 unlicensed crypto kiosks in Ohio that knowingly benefited from victims of cryptocurrency scams. The firm, which operated as S&P Solutions, allegedly pocketed a 20% transfer fee each time a scam occurred and continued to do so even after learning they were fraudulent.
According to the prosecuting attorney Andrew Rogalski, romance scammers, law enforcement impersonators, and “robocallers” exploited the lack of Anti-Money Laundering protections in the firm’s systems to transfer funds out of users’ crypto wallets. These scammers directed the victims, who are often elderly or otherwise vulnerable, to specifically go to Bitcoin of America ATMs, take money that they’ve withdrawn from their savings accounts or 401Ks, and put the cash into the machine in exchange for BTC in a wallet they think is theirs but have no control over.
During a press conference, Rogalski commented that “these ATMs are ready-made for scammers,” adding that they take advantage of victims who are often elderly or otherwise vulnerable. In one instance, an elderly gentleman lost $11,250 in three transactions to one of the dodgy kiosks in under an hour to this scam.
The firm and its executives allegedly operated the kiosks without a money transfer license and were able to do so by making written misrepresentations regarding the nature of their business to government agencies. Authorities seized 52 Bitcoin ATMs last week, but the firm has more in Ohio and other states. Bitcoin of America made $3.5 million in profit from cash deposits at these unlawful kiosks in 2021, Rogalski said.
Officials believe the firm has been operating and evading regulatory safeguards and financial compliance requirements since 2018. The investigation into the firm and its executives was reportedly spearheaded by the United States Secret Service’s Cyber Fraud and Money Laundering Task Force.
This indictment comes after the FBI’s Miami Field Office warned in October that crypto ATMs were becoming a popular vehicle for scammers to defraud victims in an increasing trend of “pig butchering” scams. It highlights the importance of proper regulation and compliance in the cryptocurrency industry to protect vulnerable individuals from fraudulent activities.
Wherever there is a new financial product or industry trend, you can be sure that there are scammers out there waiting to try and take advantage.
Cryptocurrency has exploded in recent years, and for this reason, you need to be really careful when you are involved in the industry and buying and selling crypto. There are a few common scams that you should be aware of. This will greatly reduce your chances of getting conned.
This isn’t an exhaustive list, there are certainly more crypto scams out there than on this list, but by knowing the most common ways in which you can get scammed, you’re more likely to prevent it from happening. Combine this with tools like reverse email lookup to ensure you know who to trust.
Your data is at risk when you use a crypto wallet service. There have been high-profile hacks where hackers manage to steal thousands of email addresses and other personal details. These can be published or sold on the dark web and you could even find yourself susceptible to an account takeover. When you use a crypto exchange or wallet, you must make sure that you know the company is trustworthy. Even then, some aspects are out of your hands.
ZDnet reports that there were billions stolen last year, including attacks on Exchanges to the value of $300 million in losses. Even if the cryptocurrency itself is secure, hackers may have a way around it; targeting the wallets.
This government bulletin even warns people about the fact that crypto can be susceptible to hacking.
Scamming Emails
It’s always a possibility that you will get caught out by a scam email. Many scammers send out phishing emails posing as a crypto marketplace or wallet you might be signed up to. This can make it incredibly difficult to differentiate what is real from what is a scam. If you get caught out you might end up accidentally giving your data to a scammer.
Always use a reverse email search tool so that you can check if the source of an email looks legit. It could be that it has come from a domain that is a spoof or has a history of scams.
Social Media Scams
Social media account takeovers and hacks can be dangerous. In some cases, Twitter accounts have been taken over, and people have asked for funds to be sent to their blockchain address. This is usually in return for a promise of the money being sent back double, or some other reward that is never going to come. Even Elon Musk has had his account hacked and ended up a part of one of these crypto social media scams. Twitter’s share price dropped 5% as a result.
ICO Scams
Initial coin offerings give scammers the opportunity to scam people. This could be through a fake website, for example. It appears like any other ICO but when the user deposits their coins into the wallet, money may be stolen.
ICOs can be fully fraudulent, as people use fake advertising to try and scam people out of their hard-earned cash. The SEC has even had to step in with some examples, such as Plexcoin, which turned out to be nothing more than a Ponzi scheme.
There was a huge boom in these types of scams in 2017, largely triggered by the publicity of Ethereum, but ICO scams are becoming less frequent as the industry is now regulated far more heavily, but there are some scary examples of people losing a lot of money.
How to Report Cryptocurrency Scams
When you get scammed, quick reporting might help you to try and regain the money or to stop others from experiencing the same thing.
You don’t even have to have been the subject of a scam to report it. For example, if you see something on Twitter that looks like a scam, you may want to let the authorities know.
The Federal Trade Commission is responsible for this and they have published some intriguing figures. Did you know that according to the Consumer Sentinel Network Data Book, crypto has overtaken checkbook and money order scams in frequency, and the value now exceeds that of debit card scams?
The FTC may be able to help. Go straight to the FTC at ftc.gov/complaint where you can fill in a form providing details or even contact them directly. The FTC is working hard to prevent these types of financial scams.
Conclusion
Like virtually any big, growing industry, there are teething problems. For crypto, scams are one of the biggest issues people face. This doesn’t mean that you should avoid the industry altogether, but it makes a lot of sense to be vigilant and try to ensure that you don’t lose money by being too trusting. Treat all emails and social media communication with a lot of caution when they are discussing Bitcoin or other cryptocurrencies, and ensure that you stay safe whenever giving out your details or handing over money.
