Action News Investigation: Man duped for thousands in slick cryptocurrency scheme

PHILADELPHIA (WPVI) — The cryptocurrency’s value has plummeted so much that financial experts are dubbing it the “crypto winter.”

But despite the cold, crypto scams continue to heat up, hitting record highs in the number of complaints.

The Federal Trade Commission said cryptocurrency scams now far outstrip any scam.

And the scammers are using social media to exploit their victims, including John, who has asked us to hide his identity due to the embarrassment.

“Never in my life did I think I would be a victim,” he said.

John said he found an ad on Instagram to invest in bitcoin mining, an investment area he was curious about.

“And they’re very pushy, you know, and I didn’t invest right away,” he said.

John said he was lured by the slick and professional website called Safe Coin Miners, which traced our investigation back to Nigeria.

It called for investment returns from 84% to over 100% cryptocurrency mining.

Simply put, crypto mining is the process of using powerful computers to create new digital currencies through encryption algorithms.

“They wanted me to send them $500 because $500 would make you $3,500. And I said, ‘How is that possible?’” John recalled

It is not. Nevertheless, he invested.

John said the next day his account had a balance of $3,500, which was seven times his original investment.

“It was exactly like winning the lottery,” he said.

So John said after seeing this return on paper he started sending more money.

But now everything is gone.

“I was just wrong,” he said.

Emma Fletcher, a senior data researcher for the Federal Trade Commission, warns that cryptocurrency and social media are a combustible combo for scams.

“Promises of guaranteed huge returns or claims that your cryptocurrency will be multiplied will always be scams,” she said. “No cryptocurrency investment is ever guaranteed.”

Fletcher said that since 2021, $575 million of all crypto scam losses reported to her agency came from bogus investment opportunities, far more than any other type of scam.

Most involved paying in crypto, in contrast to John, who paid in cash.

“One in four dollars reported lost to fraud was lost in cryptocurrency, which is pretty amazing,” Fletcher said.

John won’t reveal exactly how much he lost, but tens of thousands of dollars are at stake.

He said he only communicated with his suspected scammers via email and text messages.

John said he received a couple of checks to cash out as part of his investment, but they bounced.

“We’ve even had people who, just to make sure it was legit, did a little test withdrawal where they could get their money back a small amount at first,” Fletcher said. “So they’ve doubled down and are putting in more and more money.”

Our victim said that his alleged scammers still try to communicate with him occasionally because they want $4,000 more to cash out his money.

They even showed him wads of money which they said they would send to him for that fee.

“I’m not going to deal with these people anymore and I haven’t given them an extra dime,” he said.

John went to the police and they made a report but like most of these cases – it went nowhere.

The FTC says to report the scam to them at:

John said he just wanted to warn others, hoping it would save them from losing money and embarrassing themselves.

“I used to make fun of people who did that,” he said.

The FTC also said these criminal networks are increasingly targeting dating sites to find crypto scam victims.

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