With the rise of cryptocurrency and other digital assets, Indiana Attorney General Todd Rokita wants Indiana consumers to be on the lookout for risky or predatory practices related to the often-misunderstood topic.
“New technologies spark the interest of many people, and Hoosiers are no exception,” Rokita said. “Indiana consumers may be familiar with cryptocurrencies or may want to learn more about them. However, digital assets are increasingly being used by well-versed perpetrators looking to scam you out of hard-earned money.”
Cryptocurrency is one form of digital asset and is created by companies or individuals, usually taking the form of a virtual coin or token. Digital assets are intangible and generally exist only electronically. Billions of dollars of value are currently invested in cryptocurrencies around the world, with thousands of cryptocurrencies available and more being created all the time.
Most consumers purchase cryptocurrency through an online exchange platform. These assets are stored in digital wallets, which could be online in an exchange, on your computer, or on an external hard drive. But because they are intangible, if something goes wrong with your platform, your hard drive, or your computer, it is likely that you will not be able to recover your funds.
Hoosiers should be aware that the value of cryptocurrency is extremely volatile.
The Securities Division of the Indiana Secretary of State has played an active role in investigating fraud cases related to cryptocurrency and protecting Indiana investors.
“Many of the new cryptocurrency markets operate in uncharted territory when it comes to regulation,” said Indiana Secretary of State Holli Sullivan. “Scammers have moved in quickly to take advantage of people’s interest to invest. I encourage all Hoosiers to thoroughly vet any offerings related to cryptocurrency before placing their money in potentially volatile markets.”
Scammers are using a variety of methods to exploit the novelty of cryptocurrencies as more consumers are using this asset. Here are a few warning signs for scams related to cryptocurrencies:
- If you receive a tweet, text, email, or message through a social media platform telling you to pay via cryptocurrency, it is a scam.
- Scammers ask people to pay with cryptocurrency by impersonating an entity you may frequently engage with. You might be contacted by someone pretending to be a government worker, law enforcement agency, or local utility. Then the scammer directs you to go to a store with a cryptocurrency ATM to pay what they claim you owe by scanning a QR code that sends your money to the scammer. The government, law enforcement, and utility companies will not require you to pay by cryptocurrency. Don’t do it.
- Be on the lookout for “guaranteed” investment returns. Promises of high rates of return can be a sign of fraud. This is also true for “easy business opportunity” advertisements you may see. Due to the volatility of the value of cryptocurrencies, there is no guarantee you will make a profit.
- Don’t be fooled by celebrity endorsements. Do your own research, and don’t make any quick decisions based only on endorsements (that can be easily faked).
- Be aware of attempts to blackmail using email. Scammers send emails that say they have embarrassing photos, videos, or personal information and threaten to make it public if you don’t pay in cryptocurrency. Don’t do it. This should be reported to criminal enforcement authorities.
- Cryptocurrency payments are typically not reversible. This is why scammers like them.
- Cryptocurrency scams may also involve unauthorized investor advisors. Issues with possible investment advisors acting without registration should be reported to Indiana Secretary of State Holli Sullivan at [email protected] or (317) 232-6681.
Report these scams by filing a complaint at indianaconsumer.com or call Attorney General Todd Rokita’s office at 1-800-382-5516.