There is a new reason to guard your identity, financial data and other personal information – cryptocurrency scams.
“With the addition of Bitcoin ATM machines in the area, we are starting to see people get scammed,” said Edwardsville Dep. Police Chief, Michael Lybarger. “The problem is going to get worse.”
If you have heard the name but are unfamiliar with Bitcoin, it is a decentralized digital currency, or cryptocurrency, that can be transferred on the peer-to-peer Bitcoin network. Bitcoin transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain.
“The Bitcoin ATM makes it easy for anyone, even people with no knowledge of Bitcoin, to acquire it,” Lybarger said. “If someone calls or emails you, do not go to a Bitcoin ATM machine and get Bitcoin to send them. This is just a new twist on an old scam. It is easier to send Bitcoin than cash [gift] cards and there is less risk for the criminal.”
Bitcoin ATMs are kiosks that allow a person to buy Bitcoin using an automatic teller machine. Some Bitcoin ATMs offer bi-directional functionality, enabling both the purchase of Bitcoin as well as the sale of Bitcoin for cash. Bitcoin machines are not the same as traditional ATMs but work in a similar fashion.
Three are located in Edwardsville: a Quad Coin machine located at 415 N. Main St., a CoinFlip machine located at 332 S. Buchanan St. in King City Liquors, and the third is a Bitcoin Depot at 1089 South State Route 157 in the Circle K convenience store. In addition, a RockItCoin station is located at the ZX gas station at the southwest corner of Route 159 and Glen Carbon Road in Glen Carbon.
According to Norton.com, look out for red flags that may indicate a cryptocurrency scam. Some examples are if the offer seems too good to be true, a website’s address bar does not begin with “HTTPS,” the payment request is urgent or is requested in cryptocurrency, or your account logins are requested.
According to the Federal Trade Commission (FTC), 14% of all reported losses to imposter scams are in cryptocurrency. Elon Musk impersonators have stolen more than $2 million in cryptocurrency as part of scams and 20% of romance scam victims lose money via cryptocurrency scams.
Cryptocurrency scams have risen 516% from 2020 to 2021, and investors in the 20-30 age bracket are the most susceptible to being scammed.
Scammers stole almost $8 billion worth of cryptocurrency in 2021, according to the Federal Trade Commission. Norton.com reports that since October 2021, nearly 46,000 people lost crypto assets totaling $1 billion, amounting to a reported median loss of $2,600.
There are ways people can avoid cryptocurrency scams. Other than not using cryptocurrency, consumers can research before investing any money into cryptocurrencies. Since Bitcoin and others are not regulated by the government, it should be a red flag when someone says you must pay via cryptocurrency. Nothing has to be paid in Bitcoin or the others.
If you believe you have been targeted by a cryptocurrency scam, report it to the Federal Trade Commission, Securities and Exchange Commission (SEC) or Commodities Futures Trading Commission.
Unfortunately for people, there are few avenues to potentially recover scammed cryptocurrency. Those who lose crypto assets in a scam have an option to report their case to the FTC.
Bitcoin was invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto. The currency began use in 2009, when its implementation was released as open-source software. A few governments officially use Bitcoin in some capacity: El Salvador and the Central African Republic have adopted Bitcoin as legal tender, while Ukraine accepts Bitcoin donations to fund its resistance against Russia’s invasion this year.
Just as dollars are divided into smaller units, Bitcoin is, too. However, cryptocurrency constantly changes its market value, unlike dollars. One bitcoin is divisible to eight decimal places. Units for smaller amounts of Bitcoin are the millibitcoin (mBTC), equal to 1⁄1000 bitcoin, and the satoshi (sat), which is the smallest possible division, and named in homage to bitcoin’s creator, representing 1⁄100000000 (one hundred millionth) bitcoin. 100,000 satoshis are one mBTC. The bitcoin blockchain is a public ledger that records bitcoin transactions.
