I just read an article in NPR about crypto scams. The article tells about a Soviet immigrant man. He moved to the US in the 1980s. He now is semi-retired, and he works for the family business that provides supplies for restaurants. During the Covid pandemic, his family business went down. He tried to do something else to make money, it led him to crypto investment. He found a crypto broker called Spirebit. On its website, Spirebit advertises that it is a partner of many well-established cryptocurrencies such as Coinbase, Cash App, Crypto.com, Trust Wallet, etc. After he opened an account with Spirebit, a company representative called him to talk to him about anything that he wants to know about this investment. A representative could speak his native Russian language too. After a representative earned his trust. He lured him to invest more money into crypto by showing him a chart in his account that looked like his money has been multiplied in a few weeks for initial investments. Eventually, he invested all his retired saving in this crypto broker, the total amount is $340,000. When he tried to cash out his earnings, the company asked him for 2% of the fees. It sent him bank documents that the company is transferring money to his bank account. After his children learned about his investment, they found out that he has been scammed. The charts and bank documents were forged, and he felt like he is a victim of an earthquake. The NPR investigated his story, they found out that all social media accounts are fake, from profile pictures to information. The company office location is traced to a warehouse restaurant company in London, England. When he asked his bank to do something for him, the bank said because he authorized the transactions, the bank can do nothing about it. the bank told him that when he invested in crypto investment, his money was deposited into different crypto accounts, which means his money is untraceable. The bank advised him to report to the police.
Cryptocurrency is a new trend, even people invested in cryptocurrency for a long time may not know it well. In addition, because it is new, so governments in many countries don’t regulate well which creates a loophole for legal or illegal enterprises to scam investors. To my knowledge, every currency has a legitimate government to support. For example, the US Dollar is backed by the US government, and Cryptocurrency is backed by no government, so you make sure to know the high-risk investment before you play with it.