San Mateo police warn crypto scams on the rise

Wong, who is part of the digital forensics unit, believes cryptocurrency fraud schemes are a growing problem the public needs to be aware of, and he encouraged people to learn more about the dangers and how to safeguard their money. He believes some people don’t report it because they don’t want to be seen as being scammed, and the number of victims is higher than reported. The city averages about two cases per month. Wong said the Bay Area is also seeing a rise in criminal cases.

Cryptocurrency is a digital or virtual currency that utilizes blockchain technology to conduct encrypted transactions, with no intermediary entity or a middleman such as a bank needed to facilitate transactions. Blockchain technology is a digital ledger that records all transactions forever. Popular types of cryptocurrency are Bitcoin, Ethereum and Dogecoin and can be purchased through a crypto exchange, similar to a stock market, while popular exchanges are Coinbase and Robinhood. Many companies like Tesla, PayPal and Venmo are accepting cryptocurrency as a form of transaction exchange, increasing its popularity and use. The increase in use also leads to a rise in scams due to their unregulated nature and the lack of understanding.

One of the most common schemes is called the pig butchering scam. Groups with predetermined roles and responsibilities use dating apps like Tinder or Match to get to know someone and build trust. They then build a relationship through text and try to convince the person to invest in something too good to turn away. The scammers will set up a website that looks like an investment exchange or firm, convincing people to put money into it and moving finances around so it looks like the victim makes money. Once they take as much money as possible, they then shut down the website. Others use hacking methods and encourage people to call the number or phone calls impersonating an official entity like a hotel to begin a dialogue. The hacking method has the scammers impersonate a technician to fix the problem they let the victim know about. Others use ransomware that locks computer data by clicking links from phishing emails, advertisements or visiting unsecured websites. The malware issues a message telling people to deposit cryptocurrency as a form of ransom for the computer data. Wong said an older woman had a pop-up message on her computer saying her computer was locked. The woman called the number provided for help, and they eventually convinced her to go to a local Bitcoin ATM and deposit money elsewhere. People are losing anywhere between $10,000 to $500,000, according to police.

People targeted are usually people looking for love, ways to invest or the elderly who have pensions and not well versed in cryptocurrency. Wong said a red flag is those who use social media but don’t want to meet you or make excuses not to do a simple video call. Other red flags include trying to get money for investments or fast returns.

He also recommends researching the company or person to verify the information, including calling the police department. Most officers are now trained with basic investigative knowledge of cryptocurrency investigations and specialized officers are trained with advanced skills.

“If they are not sure what they are dealing with and it has to do with cryptocurrency, give us a call,” Wong said.

People can go to https://www.ic3.gov/, https://www.secretservice.gov/,  https://fbi.gov or https://bitcoin.org/en/scams for more information and to learn more. 

curtis@smdailyjournal.com

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