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State issues alert about cryptocurrency scammers

Published: Nov. 2, 2021 at 11:15 AM EDT
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TALLAHASSEE, Fla. (WWSB) - Florida officials are warning potential cryptocurrency investors about a scam making its way around social media.

State Attorney General Ashley Moody issued a consumer alert Tuesday about the bait-and-switch scheme.

Moody says the scam usually works like this: Investors are hooked by scammers who help them with legitimate trades, but then encourages the targets to transfer funds to a fraudulent trading platform where the money is stolen.

These fraudulent websites may only operate for a short time and then victims are blocked from signing in to their accounts. The victims’ “advisors” disappear at the same time.

Moody’s office has received nearly 100 complaints regarding these types of scams, with a major uptick during the last month.

“The allure of quick profits has drawn millions to cryptocurrency trading — with many new investors joining the market daily. Where there is opportunity though, there are also scammers—baiting victims with early success, then prompting them to transfer their profits to fraudulent trading platforms,” Moody said.

The attorney general’s office suggests the following advice to avoid getting scammed:

  • Always be wary of unsolicited offers to invest;
  • Know that if scammers request payment in cryptocurrency for the right to recruit others into a program and promise rewards paid in cryptocurrency, it is a scam;
  • Be wary of fake cryptocurrency trading platforms that may resemble legitimate ones; and
  • Research before investing—never wire money or provide personal or financial information until properly researching a platform and an opportunity.

The U.S. Securities and Exchange Commission created an Investor Alert guide to protect against fraud focusing on social media and investing. To find out more information, click here.

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