Editor’s note: The public forum on crypto mining canceled Monday will be held during the Cherokee County Board of Commissioners meeting at 6:30 p.m. Monday, April 18.
By Julie Goodwin, Contributing Writer
Asheville – Cryptocurrency is the hot new trend in investing, and much is still not understood about this buzzy, volatile digital payment system that does not rely on banks to verify transactions.
This has created a fertile environment for scams, according to a new in-depth investigative study by Better Business Bureau, which states: “A virtual tug of war exists between the legitimate and fraudulent use of cryptocurrency.”
The Cryptocurrency Scams: BBB Study finds lack of regulation and consumer education results in dramatic increase in fraud and financial losses – examines the many facets of cryptocurrency and the variety of ways criminals are exploiting the cryptocurrency market to steal from investors and victims of common scams.
Cryptocurrency is a form of digital money whereby encryption technology can enable anyone anywhere to send and receive payments. It does not exist in a physical form such as paper money, but as lines of computer code, supported by a decentralized computer system known as blockchain and stored in a “crypto wallet.” Bitcoin, developed in 2009, is the most popular form of cryptocurrency, available for purchase at tens of thousands of Bitcoin ATMs and increasingly accepted as payment in certain retail transactions.
Ethereum is the second most common cryptocurrency and is centrally involved in the increasingly popular non-fungible tokens, digital assets such as pictures or music that are purchased with cryptocurrency as an investment. Critically, cryptocurrency operates outside the traditional banking system and is not subject to the same protections as bank deposits or credit card transactions.
Reports from victims of large financial losses to cryptocurrency related scams are skyrocketing. In 2021, BBB received more than 2,400 complaints with monetary losses of nearly $8 million involving cryptocurrency companies.
BBB Scam Tracker reports about crypto scams numbered more than 1,200 in 2021 and likewise totaled nearly $8 million in losses. Scam Tracker reports to BBB tripled between 2019 and 2021, and reported losses tripled over the last two years.
Many victims report that after purchasing cryptocurrency, they were directed to websites where they had to create an account in order to monitor their investments.
The writer is regional director of the Better Business Bureau of Western North Carolina.