Online scams are soaring, drawing the eye of federal enforcers, who want the help of whistleblowers to prosecute and stop fraudsters.
Cryptocurrency-related complaints, an up-and-coming area of fraud, hit $5.6 billion in losses last year, up 45 percent from 2022, according to an FBI report. Investment fraud accounted for the bulk of the crimes with a cryptocurrency nexus, followed by tech support scams, personal data breaches, extortion, confidence/romance, and government impersonation.
Several federal agencies recently issued an alert warning investors about relationship investment scams, in which bad actors — often masquerading as an old acquaintance or potential romantic partner — gain a target’s trust over time, then get them to send money for false investments. These may overlap with cryptocurrency scams.
The federal government urges vigilance anytime someone makes unsolicited contact with you online, through an app, or via text messages — no matter how trustworthy the person seems, particularly if they’re asking for money. Don’t share personal finances or identity information with those who reach out in this way. The U.S. Securities and Exchange Commission offers 5 key questions to answer before you invest in anything and encourages reports of fraud to the SEC or FINRA.
But vigilance isn’t always enough, and many people still fall prey. Whistleblowers can help.
In August, the Commodity Futures Trading Commission announced a more than $1 million award to a whistleblower who voluntarily offered original information about improper crypto trading that ultimately resulted in a successful enforcement action. Whistleblowers are becoming increasingly significant in this type of enforcement, the announcement said.
In the evolving area of cryptocurrency, which may be regulated by various agencies, talk to an experienced whistleblower attorney to find out about protections for whistleblowers and about potential rewards if money is recovered.
If you have been the victim of or suspect crypto-related fraud, contact Keller Grover for a free and confidential consultation.