The surge in popularity of Bitcoin and crypto currency and blockchain technology has recently opened the doors to unprecedented scams, especially through social media. According to the U.K. fraud and cybercrime reporting agency Action Fraud, British citizens have lost over £146 million to cryptocurrency scams so far in 2021. This means that the losses in just one country are greater than most countries’ government budgets. Incredible, isn’t it?  But this is just the tip of the iceberg, as most scams and fraud cases go unreported.  The actual number of losses in the U.K. and worldwide is huge.

“One of our greatest concerns is that the number of victims keeps rising despite the alerts,” says Paul Fletcher, VP of International Due Diligence Services at Wymoo International. No one can blame an investor who falls for what they thought was a great opportunity to increase their investment, especially when crypto has been featured as the future. However, the goal is to stop people from falling victim by sharing warnings and information and offering tools that can help investors protect their investment.

In the first place, it is important to understand that Bitcoin and cryptocurrencies were designed to work as a medium of exchange and they are known for their market volatility. The value of investors’ assets can go up and down extremely fast, and by definition there is no one controlling these changes. Legitimate cryptocurrency investments are risky enough on their own, but as more people show interest and invest in cryptocurrencies, more criminals are capitalizing on this as an opportunity to commit fraud.

Fake cryptocurrency investments are advertised all over social media. You’ll find Youtube and TikTok scam videos, fake Twitter accounts impersonating celebrities, deceiving Facebook pages, and the list goes on.  Online criminals target users on Facebook and social media and online dating sites.  Investment scams in Asia and Easter Europe are booming, and payment is often made in Bitcoin.  Criminals advertise schemes promising high returns through cryptocurrency investing or mining, luring people in with offers that seem too good to be true, mostly because they are.  Paying in crypto means, if it is fraud, your money is not coming back.  Because of this, evidence and verification are critical.

How to protect your investment?

Pay special attention to unsolicited offers. If you are contacted by someone who claims to be representing a legitimate investment opportunity, try to ask everything you can. Who is this person? What is their financial experience? What trading company are they representing? Can they send documents to prove their identity and experience in the field? Keep in mind that the information obtained needs to be verified and analyzed by an international private investigator, who can obtain reliable evidence for you to base a decision.  Get evidence early in the investment consideration or relationship.

Do not rush. Good opportunities are not open forever, but if you need to rush to decide and the deadline limits your chances of verifying, then it´s best to let it slip away. As demonstrated with the amount of losses reported in the U.K., the risk of falling victim to a crypto scam and making payments to criminals in Bitcoin is huge. If you do not take the time and use professional resources, it is likely you’ll end up in those figures.

Hire a background check or due diligence. Paying for a professional investigation may seem like an unnecessary expense, but it will help prevent you from being scammed.

Think about your options if things go wrong. Most firms advertising and selling investments in crypto assets are not authorized or endorsed by any reliable entity, anywhere. This means that if you invest in crypto assets you will not be backed up by any financial authority. In other words, if you lose you are on your own.

Before investigating, take a moment to analyze the situation and hire professionals that can help you obtain evidence. Remember that evidence is the wisest of investments!

If you are communicating with someone and are considering making a payment to a company or individual in Bitcoin or crypto, contact us today.

C. Wright
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