BALTIMORE — Bad actors are seeking cryptocurrency in almost every scheme tracked by the FBI. From fraudulent investments to tech support and romance scams, and most recently, a surge in employment scams. And as Bitcoin reaches record highs, Special Agent David Paniwozik with FBI Baltimore sees more people wanting to capitalize on cryptocurrency.

“The fear of missing out. So, they want to get involved, try to make money, and it seems like a quick, easy way to do it,” said SA Paniwozik.

But a major problem is this technology is still unfamiliar to investors, making them more susceptible to scams.

“There is no cap on whether you want to move $1 to hundreds of millions or billions of dollars. You can just seamlessly move that from a wallet controlled in the United States to a wallet controlled overseas, in, you know, a matter of seconds,” SA Paniwozik warned.

Scammers set up their own cryptocurrency exchanges, making you believe your investment has grown exponentially, or they say you must make cryptocurrency payments to “unlock work” that offers high payouts.

The FBI Internet Crime Complaint issued an alert in June about this work-from-home scam.

“It’s this confusing compensation structure that the scammers try to tell them, and it looks like, hey, if I pay $10 to rate this product, I’ll get $15 in return, so then once they do that round, the scammer says, okay, well, you need to deposit more money to get to the next round of work,” said SA Paniwozik.

And when victims go to cash out, they’re told they can’t.

SA Paniwozik has seen a huge spike in reports of employment scams involving cryptocurrency. Reported losses in Maryland went from $32,033 in 2023 to $3.8 million between January and October of this year.

“So you’re looking at about $15,000 to $20,000 per person on average that has fallen victim in Maryland alone to these scams,” said SA Paniwozik.

Cryptocurrency is desired by scammers because transactions are instant and irrevocable, but that doesn’t mean they’re untraceable.

“On the blockchain, we can look up those addresses, and then if we wanted to reverse trace it, we could find, let’s say it’s a certain exchange that paid into this wallet, we can then serve legal processes to say, hey, can you give us a list of all user accounts that paid into this address and possibly contact those victims live and say, hey, you’re currently being the victim of one of these scams,” SA Paniwozik detailed.

It’s a new proactive approach by the FBI as these scams become more prevalent and costly.

According to the FBI’s 2023 Cryptocurrency Fraud Report, cryptocurrency-related complaints only made up around 10 percent of total financial fraud complaints, however, the stolen value accounted for almost 50 percent of total losses.

Click here to see the other 12 Scams of Christmas.

SCOTTSDALE, AZ (AZFamily) — Scottsdale police say a Tempe man who posed as an Uber driver stole more than a quarter million dollars in cryptocurrency from unsuspecting victims who just wanted a ride.

According to authorities, Nuruhussein Hussein posed as a fake Uber driver on two separate occasions, on Mar. 31 and Oct. 11, at the W Scottsdale hotel near Scottsdale and Camelback roads.

Scottsdale Police Sgt. Allison Sempsis said the victims would be asked to unlock their phones so the driver could look up directions or make sure they were connected to the Uber app.

Instead, court documents allege that Hussein would transfer money from their crypto digital wallet to his own, which prosecutors say totaled a combined value of $302,000 as of this week.

Arresting documents say that in October, the victim gave Hussein the phone so he could try to “connect” the ride, but he began to drive down the block before handing back the phone, saying he wasn’t able to link the ride.

Later that morning, the victim noticed several emails indicating a crypto transfer had gone through, which said he had sent two Bitcoins.

Detectives from Scottsdale PD’s financial crimes unit were able to link IP addresses from Hussein’s digital wallet to his home.

The digital wallet showed he had converted the Bitcoin to a different currency: Monero/XMR, which police said is more difficult to trace.

Police were also able to link Hussein to a similar case that was reported in March.

In that case, a victim reported feeling threatened if he didn’t hand his phone over because there was a gun near the center console when Hussein allegedly said, “If you don’t chill out, something bad going to happen.”

Scottsdale police detectives and Secret Service Special Agents are still investigating.

Arizona’s Family has reported on several recent crypto scams, including that of a woman who lost $204,000 in crypto to the fraud scheme.

Last year, two men from Maricopa County were charged for reportedly ripping off hundreds in an elaborate crypto investment scheme.

What is crypto?

Cryptocurrency has been around for a while now, but seen come under the spotlight in recent years.

In basic terms, cryptocurrency is digital money. This kind of currency is designed to work through an online network without a central authority — meaning it’s typically not backed by any government or banking institution — and transactions get recorded with technology called a blockchain.

Bitcoin is the largest and oldest cryptocurrency, although other assets like Ethereum, Tether and Dogecoin have gained popularity over the years.

Some investors see cryptocurrency as a “digital alternative” to traditional money — but it can be very volatile, and reliant on larger market conditions.

The Associated Press contributed to this report.

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With Bitcoin topping $100,000 and a crypto-friendly administration coming into the White House, cryptocurrency has taken a major step into the spotlight.

But a real debate continues about its future. While some major financial institutions are embracing and adapting to the change, others remain wary of investment.

Unlike traditional currencies issued by governments, cryptocurrencies like Bitcoin and Ethereum are not controlled by any central authority, which makes them less susceptible to government interference or manipulation. Is that an argument for or against crypto? And what should average investors know about how this change could affect their savings and retirement accounts? As more people and businesses legitimize digital currencies, understanding the underlying technology and its implications becomes essential in navigating this rapidly evolving financial ecosystem.

Guests:
David Yaffe-Bellany, New York Times reporter covering the crypto industry

Lee Reiners – law professor at Duke University and crypto skeptic

Danny Nelson – reporter with CoinDesk and crypto optimist.