MEMPHIS, Tenn. — As the popularity and price of Bitcoin, Dogecoin, and Ethereum rise, so do the number of scams associated with these digital currencies.
The Better Business Bureau of the Mid-South said cryptocurrency investment scams are on the rise and there are several ways scammers are trying to swindle people out of their money.
Already this month, the BBB of the Mid-South has had nine reports of scams associated with cryptocurrency.
FOX13 spoke with one victim who said he lost almost $1,000.
“It looked sketchy, but at the moment I was trusting the word of a friend,” Darnell Stewart of Memphis said.
Stewart got messages on Instagram from a friend he trusted. His friend told him he was investing in a company using bitcoin and was making a good profit.
“When I messaged him, I was like ‘Is this legit? Is this something I should invest in?’ He was like ‘Yeah, you should totally go for it.’”
Taking what he thought was his friend’s advice, Stewart invested money in the company which turned out to be a scam.
“When I finally got in touch with my friend on the phone, I was like ‘Hey man, what’s the deal? You told me this company was legit and it’s not.’ He’s like ‘Yeah, I lost control of my account. That’s not me you’re talking to.’”
As cryptocurrencies like bitcoin, dogecoin and others gain in popularity, scammers are taking advantage.
“It’s kind of like the wild, wild west. There is just not a lot of regulations on it,” Daniel Irwin with the BBB of the Mid-South said.
Irwin said they’re also seeing people pose as celebrities and billionaires online to entice people to make investments in fraudulent companies.
“Anytime the pitch claims the investment involves no risk with guaranteed profit, stay away from it,” Irwin said. “That is going to be a scam.”
Irwin said doing a little research before you invest can go a long way.
As for Stewart, he’s using his mishap to warn others.
“Even if it’s coming from someone you know on social media, maybe wait to get the information from them face to face because social media can be hacked,” he said.
Irwin said you can find out if a company is legitimate by checking the Commodities Future Trading Commissions website.
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