As Bitcoin and other cryptocurrencies continue to gain mainstream acceptance, more retail investors and investment advisors are putting their money into the digital currency market. Unfortunately, the rise in popularity of cryptocurrency investing has led to a rise in cryptocurrency-related fraud scams as well. As a result, the AARP has recently issued a cryptocurrency fraud alert for seniors. Here, Bitcoin lawyer Jake Zamansky discusses the AARP’s fraud alert and shares his own thoughts on what seniors (and all other cryptocurrency investors) need to know.
3 Common Cryptocurrency Investment Fraud Scams
The AARP’s fraud alert highlights three particular types of cryptocurrency investment fraud scams that present risks for unwary investors. These are:
1. Bogus Websites
Since Bitcoin and other cryptocurrencies are not traded on regulated exchanges, some fraud artists are setting up bogus websites touting investment advice or ways to invest in cryptocurrency. Once people “invest” their money, the fraud artists simply take the money and pocket it for their own financial gain.
2. “Celebrity” Endorsements
Celebrity endorsements, especially on social media, have become a popular way for companies to promote investment opportunities. However, fake “celebrity” endorsements have also become a popular way for fraud artists to pump up the price of cryptocurrency investments so that they can sell for a profit. These fake endorsements include the impersonation of well-known celebrities and investors as well as the creation of made-up personalities of successful Bitcoin investors.
3. Ponzi Schemes
“Some cryptocurrency crooks peddle nonexistent opportunities to invest in digital currencies and creating the illusion of big returns by paying off old investors with new investors’ money.” This is the classic Ponzi scheme model applied to the modern-day world of cryptocurrency. Investors who lose money in these schemes may be able to recover their losses, but to do so, they will need to engage a Bitcoin lawyer promptly.
The Risk of Unsuitable Investment Advice
In addition to these types of fraud scams (among others), individuals who invest in cryptocurrency through brokers and advisors must also be wary of the risk of receiving unsuitable investment advice. While Bitcoin and other cryptocurrencies are becoming more mainstream, they are still highly volatile (and thus high-risk) investments. Investing in cryptocurrency isn’t right for everyone, and it can be particularly dangerous for seniors who rely on their investments in retirement.
What to Do if You Lose Money Due to Cryptocurrency Investment Fraud
If you have received unsuitable investment advice, or if you have lost money in a cryptocurrency fraud scam, you should speak with a Bitcoin lawyer right away. Depending on exactly what happened, a lawyer may be able to recover your losses in court, or you may be able to pursue a claim in FINRA arbitration. In any case, acting quickly is extremely important; and, if you have any questions or concerns, we encourage you to contact us promptly for a free consultation.
Speak with a Bitcoin Lawyer at Zamansky LLC Today
Zamansky LLC is an investment fraud law firm that helps Bitcoin and other cryptocurrency investors recover their fraudulent losses. To speak with an experienced Bitcoin lawyer in confidence, call 212-742-1414 or tell us how to contact you online today.