Very high profits are possible when trading cryptocurrencies. However, fraudsters are increasingly lurking when buying Bitcoin and Co. online. How to recognize them and how to invest safely.
Anyone who wants to buy cryptocurrencies on the Internet should be careful. Because fraudsters are taking advantage of the ongoing low interest rate phase and the lack of consumption options in the corona pandemic, as reported by the Brandenburg consumer center. The State Criminal Police Office of Rhineland-Palatinate is currently warning of a perfidious scam: consumers receive counterfeit articles from the most well-known tabloid in Germany by e-mail. They say that even celebrities allegedly invested money on various online trading platforms and quickly became even richer.
The scammers also use the name of a television show, for example, in which investors are sought for products with the presentation of business ideas. They also use social networks and messenger services to search for potential victims.
Scammers are urging consumers to deposit more and more money
Anyone who falls for it and deposits money on a supposed trading platform is often already part of an organized scam. “The money paid is often not invested at all. It is usually gone immediately. The damage to those affected is in the five-digit range,” says Erk Schaarschmidt, financial expert at the consumer advice center.
It starts with a comparatively small investment of 250 euros. The scammers claim that this should already be enough for significant profits. Consumers can check their supposedly growing assets on a professional-looking bank statement.
But then the scammers really get going. Personal advisors build up massive pressure via chats on Facebook, Whatsapp and Co. and demand more and more money from their victims. If one wants to have one’s winnings paid out, the demand for additional thousands of euros follows, such as for alleged profit taxes, exchange rate fees, proof of liquidity or premiums for profit-preserving insurance. However, no money is paid out to consumers.
“Those affected tell us about personal relationships that the scammers built up with them, going so far as to tell each other about bereavements in the family or something similar,” says Schaarschmidt. If you find yourself in such a situation, you should urgently seek help – for example from family members or friends. The consumer center also offers support.
How to Spot Scammers in Cryptocurrency Trading
The rogue trading platforms change their names frequently. There are complaints from consumers, for example, about the company names profitstrade, Cryptodeutsch, BSB-Global, interactive-trading, CB Payments, NBV International sro, Joshua Development LTD and Moonpay Ltd. In addition, the consumer advice center points out that it cannot be ruled out that fraudsters use the names of real companies to falsely suggest a serious impression.
In principle, fraudulent platforms can be identified based on various characteristics. “You can often recognize the fake pages by the fact that the imprint is missing or has gaps. For example, you often look in vain for the registration number with details of the respective financial supervisory authority,” explains Schaarschmidt. Addresses, accounts and telephone numbers often come from abroad, for example from the Caribbean. The financial expert warns: “Transfers to foreign accounts, such as in Switzerland, Latvia, Estonia or Bulgaria, make it almost impossible for consumers to get their money back afterwards. That’s why it’s so important to check the contractual partner for seriousness before investing and cancel the transfer process at the latest when making a payment abroad.”
First of all, it is advisable to take a closer look at the platform’s business model. “If you only get more detailed information about the business model after contacting us or after registering, mistrust is announced,” reports the Rhineland-Palatinate State Criminal Police Office. Another sign of a dubious homepage is the request to advertise joy. Behind this are so-called snowball systems, which are based on a constantly growing number of participants, explains the State Criminal Police Office of Rhineland-Palatinate.
Finally, the payment to the members is financed by the deposit of the newly recruited participants. “Such systems inevitably break down after a certain time,” it continues. In addition, you should check in advance whether the Federal Financial Supervisory Authority (BaFin) or another EU country has issued a corresponding license.
If you think you have fallen for a scam, you should contact the police immediately and report it. If consumers suspect a dubious offer, they can inform BaFin by email.
Custodian offers more security
“Anyone who wants to start investing should get as much independent information as possible beforehand in order to develop a strategy that is tailored to their own circumstances,” says financial expert Schaarschmidt. Having an account with a custodian reduces the risk of fraud. Stiftung Warentest offers an overview of the services and costs of various banks.
Consumers who still buy Bitcoin, Ethereum and Co. on the Internet should treat the cryptocurrencies and access data like bank account data. You should therefore not pass on access data to third parties and keep them safe – it is advisable not to save them on the computer; this reduces the risk that the data can be stolen in the event of an infection with malware.
When generating passwords, so-called online seed generators should be avoided. Common programs for managing cryptocurrencies usually offer the required function. Otherwise, the provider refers to a local and therefore secure way to generate a password.
Sources:Press release State Criminal Police Office Rhineland-Palatinate, Consumer Center Brandenburg, Crime Prevention Rhineland-Palatinate