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International Investment Fraud Cases and the Bitcoin Connection

Posted On   date08/12/2020

International Investment Fraud Cases and the Bitcoin Connection

International investment fraud has been exacerbated since the appearance of cryptocurrencies. With no regulations, control or bank as a middleman, fraudsters have an easier way to move funds around and hide their tracks.  Moving funds without detection or personal data is golden for criminals.

It is surprising that in a world full of fraud, some investors skip the best practices that could save them from financial loss.  The lack of company background checks and professional international due diligence is a common factor among fraud victims, who failed to consider an investigation before putting their money into a deal. Fortunately, every day more and more investors are realizing how important it is to have clear evidence that can shed light on which are the real deals and which are fraud.

Being cautious is always a must, and there are signs of scams that investors can look for. By avoiding these traps, users can improve their chances of success and protect their investments.

Beware of the “unbelievably good deals”

Nothing lasting or worthwhile is ever earned without the proper work and resources. If you see an opportunity for fast cash, take a step back and analyze what you could be getting yourself into. People fall prey to online and traditional investing fraud because they are blinded by the promise of quick money for little work. In general, be extra cautious when an investment opportunity has a very narrow time frame to be completed. Do not rush into financial decisions based on the promise of great returns, not without verifying first. Protect yourself and your organization from becoming a victim by making rational, calculated financial decisions based on evidence and due diligence.

Common Bitcoin fraud cases

Despite their decentralized nature, most cryptocurrencies are bought and sold at exchanges. While this makes it easier to find the coins investors desire, there is still no regulatory body overseeing these exchanges in many countries. Without regulations or control, investors are the ones dealing 100% with the risks associated. No one will respond or help a scam victim.

Another common scheme fake companies use is to pretend to sell goods, machinery and equipment. Online fraudsters create specific websites for this, but they also use platforms like Alibaba to do so. Payments need to be completed with Bitcoin only, which is a major red flag. Once the money is sent to someone’s crypto wallet, there is no way back. In the event of fraud, Bitcoin supports anonymity, which is why you’ll never know who you really sent the money to, or where it has gone.

How to avoid bitcoin investment fraud

If you plan on doing business abroad, verify the company you are dealing with is legitimate and the contact person is an actual representative of the business.  A due diligence investigation can minimize your risk, verify the offer and potential business partner, identify risk factors and provide evidence.

Remember to always think logically when it comes to your money, and to rely on professional investigators to guide you in the right direction when you are unsure about a deal.

Listen to authorities’ warnings

The SEC’s Office of Investor Education and Advocacy is warning people to scrutinize investment opportunities that claim high guaranteed returns and little or even no risk. Their staff has observed investment scams where fraudsters claim to invest customers’ funds in proprietary crypto trading systems or in “mining” farms. After the investors make an investment, fraudsters stop communicating with the investors altogether. These scammers can quickly send your money overseas, with little chance of you being able to get it back. Sometimes the fraudsters direct investors to pay additional costs (such as purported taxes) to withdraw fake “profits” earned from the investment.

Contact us for a free investigation quote if you plan to invest internationally.

C. Wright
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