Crypto Scams Are on the Rise. Here's What to Watch Out For.
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This podcast is brought to you by ReliaQuest. Cyber criminals are constantly attacking. They want your data. They want your identity. They want your innovation. ReliaQuest fortifies your business with agentic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest, agentic defense for the enterprise. Learn more at ReliaQuest.com. That's R-E-L-I-A-Q-U-E-S-T.com. Thank you.
Here's your money briefing for Friday, July 23rd. I'm J.R. Whelan for The Wall Street Journal. The price of Bitcoin dipped below $30,000 this week for the first time in about a month. And while the recent crypto sell-off is making some investors nervous, there's another factor lurking that can give them nightmares. Scammers.
There are a lot of bad actors trying to capitalize on how sexy this market has looked in the last several years.
Dave Michaels covers white-collar crime and financial enforcement for the WSJ. Coming up, we'll talk with him about crypto fraud, how you can stop scams, and what regulators might do to address them. That's after the break.
This podcast is brought to you by ReliaQuest. Cyber criminals are constantly attacking. They want your data. They want your identity. They want your innovation. ReliaQuest fortifies your business with agentic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest, agentic defense for the enterprise. Learn more at ReliaQuest.com. That's R-E-L-I-A-Q-U-E-S-T.com.
It's easier than ever for individual investors to buy cryptocurrencies like Bitcoin and Ethereum. But fraudsters have also found more ways to dupe consumers into forking over their money. Our financial enforcement reporter Dave Michaels has been tracking the growing world of crypto fraud and the efforts to contain it. And he's with us now. Dave, thanks for being here.
Thanks for having me.
So, you know, Dave, it's one thing for people to lose money from watching the value of their crypto holdings drop. It's another thing to lose money in a scam. How big a deal is crypto fraud and how much money are we talking about that people have reported losing?
There probably are some good estimates of this, but it is hundreds of millions of dollars. There's one Ponzi scheme that the SEC went after not that long ago that was purported to be a billion dollar Ponzi scheme. So because there are so many different coins and so many different scams, it's hard to say like, well, there's one figure, but it's a lot. There are a lot of bad actors trying to capitalize on how sexy this market has looked in the last several years.
And why are so many scammers going after cryptocurrency investors?
You know, I think whenever you have, whether it's cryptocurrencies or stocks, real estate, whenever you have people who think they can get over on other people who don't know very much, you're going to have scams. But one of the problems with cryptocurrencies, and this is just the way the market works, is there are not licensed intermediaries and licensed gatekeepers. So if someone calls you up and tries to sell you a stock that you've never heard of, you might say, well, hey, what's your name? I need to look you up on the industry clearinghouse for broker-dealers and find out if you're really licensed, right? You can do that. You can go online to Finro's website and check whether someone really is licensed or not.
You You can't do that in crypto. So if someone hits you up on social media and says, oh, my gosh, this is the coolest new project in crypto. There's no way to easily background that person. You don't know if they're licensed. Probably you shouldn't be dealing with somebody who hits you up on social media anyway. When it comes to purchasing an investment, you should look to the most credible source.
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