BALTIMORE — The FBI is warning about an increase in cryptocurrency scams.
As the value of cryptocurrency soars, so has interest by investors and scammers.
“I mean, the bad guys all want cryptocurrency because it’s not traceable, they love that,” said Bill Sieglein, a cybersecurity expert and former U.S. intelligence official.
Cryptocurrency is unregulated and the transfers are instant, which makes it easier for bad actors to evade law enforcement.
“Once the transaction is completed, it’s irreversible and it’s much more difficult for us to assist a victim in recovering funds,” said Keith Custer, Supervisory Special Agent with the FBI Baltimore field office.
And recently, the FBI has seen an increase in scammers directing victims to use physical cryptocurrency ATMs and digital QR codes to complete payment transactions. In these schemes, scammers falsely pose as representatives of government agencies, law enforcement, a legal office, or a utility company.
“He says, well, your bill is really behind and we need you to get it caught up,” said Natasha Clendenin-Bey, a business owner who received a call from someone claiming to be with Baltimore Gas and Electric.
The caller threatened to turn off her power if she didn’t pay the balance at the nearest CoinMe kiosk. And she believed him because she knew she was behind on her bill. She had recently purchased the business, and the transfer process was taking awhile to complete.
“He’s still on the phone this entire time, and I’m standing in front of the machine, okay, I don’t see a button that says pay your BGE bill, he says no, we’ve started something new and we’re doing Bitcoin, you can pay. And because I’m just distraught, I’m trying to get back to the store before my appointment comes, I’m like whatever,” said Clendenin-Bey.
Clendenin-Bey ended up losing a thousand dollars.
“There are cryptocurrency ATMs and all of the criminals know where they are and they are very happy to give you instructions on how to go there and get the cryptocurrency for them,” Sieglein said.
Sherrett Jacobs didn’t owe any money, instead, she wanted to make some. And someone claiming to be with a cryptocurrency investment company contacted her on Instagram.
“They started investing on my behalf and I was able to see on my dashboard on fx-switchboard.com that the money was literally going up in increments. It never went down. It only went up over the course of three days,” Jacobs said.
According to the investment website, her $300 had suddenly become $9,000.
“They told me that I had to pay a one-time fee of $1,500 in order to withdraw this money,” Jacobs said.
So, she sent the money via Bitcoin.
“I got an email from their ‘customer service’ that in order for the withdrawal to be processed, I had to pay the IRS a fee of $2,500,” said Jacobs.
She went to her brother, another cryptocurrency investor, who confirmed that over those three days, her investment would’ve gone down, not up, and the company isn’t who they say they are.
Scammers have also been known to steal cryptocurrency by setting up fake dating profiles or falsely claiming victims won the lottery and need to send fees via cryptocurrency before sending their winnings.