Soaring Bitcoin Value Leads To Email Scams

The Bitcoin explosion, fueled in part by reports of Bitcoin billionaires, has led to a rise in cryptocurrency swindles, and scams in which Bitcoin is demanded as payment — in some instances to avoid violence.   

The Securities and Exchange Commission warned investors this week that there are risks associated with “largely unregulated digital currencies,” ABC News reports. 

According to ABC, the SEC has created a division to monitor for scams, and it has brought its first case, against a Canadian company called PlexCorps that allegedly floated a fraudulent initial coin offering, or ICO.

Meanwhile, the UK’s BT warns of phishing emails that ask recipients to “confirm some details, claim some Bitcoin, or buy some at a great price.”

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Some schemes target actual holders of Bitcoin accounts: They are directed to fraudulent websites that look like their traders’ sites. In some cases, scam artists also cold call by phone. 

In another twist, the FBI has alerted Iowa and Nebraska residents to a scam in which phishing artists threaten victims with harm if they do not receive Bitcoin payment.

According to The North Platte Telegraph, recipients are told by email “that they need to pay Bitcoin in order to avoid them or their family members from being hurt,” in the words of FBI spokesperson Huston Pullen.

For example, a woman in Radnor, Pennsylvania received an email from a purported hitman, saying that she had to make a Bitcoin payment to avoid being killed, according to NBC.

“Similar emails have been generated from overseas domains and were sent out by the thousands in the hopes that someone would fall for it, according to investigators,” NBC reports.

Given all this, authorities urge consumers to:

  • Hang up on callers claiming to offer Bitcoin deals, or who want to update account information.
  • Avoid giving any information at all via email or phone.
  • Contact trading partners directly if a solicitation is received.
  • Beware of anyone who asks for payment via MoneyGram or GreenDot prepaid carts.
  • Notify authorities immediately if threatened by so-called email “hitmen.”

Bitcoin has also been demanded as ransom in cyber breach shutdowns.

According to reports, the Winkelvoss twins Cameron and Tyler hold Bitcoin that is now worth at least $1 billion, based on an $11 million investment.

“We think it’s the starting gun to a whole new phase of liquidity and price discovery and sophisticated entrance to the market,” Tyler Winklevoss said in a Bloomberg Television interview, Fortune reports.

 

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