BALTIMORE — Bad actors are seeking cryptocurrency in almost every scheme tracked by the FBI. From fraudulent investments to tech support and romance scams, and most recently, a surge in employment scams. And as Bitcoin reaches record highs, Special Agent David Paniwozik with FBI Baltimore sees more people wanting to capitalize on cryptocurrency.
“The fear of missing out. So, they want to get involved, try to make money, and it seems like a quick, easy way to do it,” said SA Paniwozik.
But a major problem is this technology is still unfamiliar to investors, making them more susceptible to scams.
“There is no cap on whether you want to move $1 to hundreds of millions or billions of dollars. You can just seamlessly move that from a wallet controlled in the United States to a wallet controlled overseas, in, you know, a matter of seconds,” SA Paniwozik warned.
Scammers set up their own cryptocurrency exchanges, making you believe your investment has grown exponentially, or they say you must make cryptocurrency payments to “unlock work” that offers high payouts.
The FBI Internet Crime Complaint issued an alert in June about this work-from-home scam.
“It’s this confusing compensation structure that the scammers try to tell them, and it looks like, hey, if I pay $10 to rate this product, I’ll get $15 in return, so then once they do that round, the scammer says, okay, well, you need to deposit more money to get to the next round of work,” said SA Paniwozik.
And when victims go to cash out, they’re told they can’t.
SA Paniwozik has seen a huge spike in reports of employment scams involving cryptocurrency. Reported losses in Maryland went from $32,033 in 2023 to $3.8 million between January and October of this year.
“So you’re looking at about $15,000 to $20,000 per person on average that has fallen victim in Maryland alone to these scams,” said SA Paniwozik.
Cryptocurrency is desired by scammers because transactions are instant and irrevocable, but that doesn’t mean they’re untraceable.
“On the blockchain, we can look up those addresses, and then if we wanted to reverse trace it, we could find, let’s say it’s a certain exchange that paid into this wallet, we can then serve legal processes to say, hey, can you give us a list of all user accounts that paid into this address and possibly contact those victims live and say, hey, you’re currently being the victim of one of these scams,” SA Paniwozik detailed.
It’s a new proactive approach by the FBI as these scams become more prevalent and costly.
According to the FBI’s 2023 Cryptocurrency Fraud Report, cryptocurrency-related complaints only made up around 10 percent of total financial fraud complaints, however, the stolen value accounted for almost 50 percent of total losses.
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