HONOLULU (HawaiiNewsNow) - As cryptocurrency grows in popularity, it is also becoming a tool for scammers.
In its latest report, the Better Business Bureau says that cryptocurrency fraud accounts for the loss of millions of dollars.
While many people have heard of popular forms of digital currency like Bitcoin and Ethereum, the BBB says many don't know enough about the coins and are vulnerable.
“There are a lot of unknowns,” said Roseann Freitas, BBB communications manager. “People don't know how it works, but they hear a lot of stories of great returns on investment and they're curious. So they go ahead and jump in without understanding what cryptocurrency really is.”
The bureau says reports of fraudulent activity involving crypto have tripled in the last three years.
Reports show that cryptocurrency scams are six times more lucrative for criminals than more common schemes, and many are found on social media.
“A lot of people are being duped by the usual pump-and-dump type of scam, like 'hey, do you want to participate in this downstairs?'” said technology and cybersecurity expert Ryan Ozawa.
“It will be really big and cool, but you are the one who keeps the bag and many times they are looking for cryptocurrency payments.”
Officials say that what makes cryptocurrencies exciting is also what can make them so dangerous: lack of regulation.
"It's not backed by the bank or the federal government, so it's not insured by the federal government, which is what we're used to when dealing with banks," Freitas said.
“We know that we put our money in a bank and that there are some protections in place in case things go wrong and we can get our money back. that does not happen with cryptocurrencies.”
BBB advises consumers to do their homework, not to be fooled by celebrity endorsements, and that the promise of guaranteed earnings usually means a scam.
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