Cryptocurrency scammers use social media to target new victims

Feds see massive spike in cryptocurrency scams

Cryptocurrency scammer using social media to target new victims
Cryptocurrency scammer using social media to target new victims

DETROIT – Bitcoin is the most common form of cryptocurrency on the market but there are many others to choose from and different exchanges to trade them.

Danielle and Chris Girt put $500 into what they thought was a Bitcoin investment on Facebook. It turned out to be a scam.

“In the beginning, everything was kind of lining up legitimate, that was initially. When we started to get really skeptical was when they requested more money in order to even get a withdrawal,” Danielle Girt said.

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Federal investigators said there has been a massive spike in cryptocurrency scams. Since October, nearly 7,000 people have reported losses of more than $80 million. The average loss was nearly $1,900.

IRS Special Agent Christopher Janczewski investigates cryptocurrency cyber crimes.

“I think one of the easiest things people can get caught up with is that they’ve heard the stories of somebody being an early adopter to a cryptocurrency like Bitcoin and then years later they are a multimillionaire. So there’s kind of this fear of missing out on the next wave,” Janczewski said.

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Janczewski said it’s important to research before putting in your cash.

“There are 1000s of different cryptocurrencies out there. Some legitimate, some not. And I think the kind of planning to get in early kind of causes people to not give as much thought as they would with maybe another type of investment,” Janczewski said.

The Federal Trade Commission said victims are often lured to bogus websites promising big returns for crypto investors.

“People are aware of, like, spam emails or maybe they see some type of video on YouTube or something promoting a whatever type of cryptocurrency. But another way that has not gotten a lot of attention is online dating,” Janczewski said.

In Detroit, the crypto coin center was open to doing Bitcoin transactions. According to federal documents, the owner Mark Rocca did so illegally. There were at least 380 illegal exchanges of cryptocurrency for U.S. dollars totaling nearly $225,000. He kept no records. Nobody showed ID.

Mark Rocca took a plea deal. Charges included conspiracy to launder monetary instruments. Federal authorities said he laundered more than $250,000. He faces up to 20 years in prison and a half a million-dollar fine. He will be sentenced in July.

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About the Authors:

Karen Drew is the anchor of Local 4 News First at 4, weekdays at 4 p.m. She is also an award-winning investigative reporter and part of the Local 4 Defenders team.