Cryptocurrency Investment Scams

Minute Read

In the ever-changing financial currency world, it is important to understand the new and the old. Let’s start with the new cryptocurrency. There is a lot of unknown on how it works which leaves the door open for scammers to take advantage of unknowing individuals. We’re here to help you understand what cryptocurrency is, what red flags to look out for and how to protect yourself from scams.

What is cryptocurrency?

Cryptocurrency, crypto for short, was introduced to the market in 2009 with the launch of Bitcoin. Crypto is a digital or virtual currency that uses cryptography for security. It is not controlled by a bank or government and is stored in an online database called a blockchain.

What are the red flags?

• You are approached by someone online or someone you don’t know sharing they have investment opportunities for you. Legitimate investment opportunities rarely come from unsolicited sources.
• Someone else is managing your investment for you, and you have no control over your own funds.
• The opportunity seems too good to be true. High-risk investments could offer high returns, however, guaranteed profits in the volatile crypto market are unrealistic.
• Your money is not going to a well-known, regulated or licensed investment broker or exchange.
• You are required to pay taxes and extra fees up front. Taxes are never paid up front, and legitimate investment platforms have clear fee structures.
• You are unable to convert your crypto to cash at any time. An investment platform may enforce limits on withdrawals to other financial institutions but should not restrict your ability to convert crypto to cash.
• Requests for withdrawals of the majority of your savings or applying for loans to cover investments or investment expenses. This could lead to significant financial losses.

How can you protect yourself?

• Research every part of the transaction before committing any funds, including the company with which you are doing business.
• Be wary of unsolicited offers and opportunities.
• Determine your personal risk tolerance and only invest what you can afford to lose.
• Never share your private wallet, account or key information with anyone.
• Remember that if something seems too good to be true, it probably is.

Your best defense against these scams is to use these tips to stay vigilant. Be sure to reach out to trusted professionals and when in doubt, give us a call at (800) 826-4314 or visit one of our nearly 60 branch locations for assistance.