People have gotten rich off of crypto currency which is why new investors are diving in, but that lure of easy money has crypto scams on the rise. Seven’s Kevin Ozebek investigates.
Cristina Demers learned the hard way that social media is where crypto scammers like to prey.
Cristina Demers: “Don’t just trust things on Facebook or any other social media.”
A few weeks ago while browsing Facebook, a post on crypto currency caught her eye.
Cristina Demers: “I noticed that a friend from high school had posted about this investment opportunity, and she was making claims how much money she had made in return.”
Cristina sent her a direct message and asked if the post was legitimate. The friend responded it was and gave Cristina a phone number for a crypto investment specialist named Jane.
Cristina Demers: “I was suspicious because anything that sounds too good to be true usually is too good to be true. But because it was coming from somebody that I had gone to school with, I thought it was something I could trust.”
Cristina texted Jane and agreed to send her $500 to invest in crypto currency.
Cristina Demers: “Then the following day she contacted me and she had some inside information that were was a coin that was going to increase in value and that I should top off my investment.”
So Cristina sent Jane an additional $500.
Over the next few days, Cristina saw the $1,000 investment soar to more than $19,000. She wanted to cash out.
Cristina Demers: “I was like, ‘Oh, I can use this money to plan a trip for the family, or I can buy some nice stuff for myself.’ Then, that’s when all of the shadiness started happening.”
Cristina was told before she could get her money, she would have to pay additional fees.
A $3,000 withdrawal fee, a $900 insurance fee and a tax fee of $2,500 to name a few.
Cristina went back on Facebook and asked her high school friend about the fees.
Cristina Demers: “I thought it was a scam. But again, I reached out to this person who initially introduced me to Jane, and she confirmed yes, that’s true. ‘You have to do that in order to get your money.’”
Between the initial investment and the fees, Cristina sent Jane $10,700.
She has received nothing back.
Emma Fletcher, Federal Trade Commission: “If they send money on one of these scams, then they’re told they need to send more money to get the original investment back stop right there. Anything you send is going to be gone.”
The Federal Trade Commission says more than $750 million in crypto connected fraud was reported last year.
The FTC has this advice:
Emma Fletcher: “If somebody is telling you that they know a better way to make money with cryptocurrency, that’s a big red flag.”
Cristina now thinks her friend’s Facebook account was hacked.
Cristina Demers: “I said, if it is not hacked take a picture of yourself and hold up a sign with the date and she’s like, I can’t do that.”
Cristina did report the theft to the FTC, but the odds of getting her money back are slim.
The FTC says if a crypto investor promises a big payout that is a huge red flag. No one can guarantee a set return with crypto currency.
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