20.10.2020

FBI Warns COVID-19 Scammers Are Targeting Crypto Holders

Scams may also come in more traditional methods like blackmail, but with a “twist:” the scammer threatens to “infect you and/or your family with coronavirus unless payment is sent to a Bitcoin wallet.”

The Federal Bureau of Investigation (FBI) warned Monday that fraudsters are about to unleash a surge of coronavirus cryptocurrency scams.  

As foretold by the FBI, the threat is universal, unyielding, opportunistic and incredibly dangerous. The issue is compounded by the fact that an increasing number of merchants are now accepting crypto, the warning said.

“Fraudsters are leveraging increased fear and uncertainty during the COVID-19 pandemic to steal your money and launder it through the complex cryptocurrency ecosystem,” the FBI said, and they’re targeting victims regardless of their age.

Agents believe these scammers will tailor their pitch to the current situation, perhaps posing as newly-remote workers collecting “donations” via email, safety equipment vendors working beyond established e-commerce, or even as “charities” that take cryptocurrency, which is “a significant red flag.”

Agents advise internet users to employ common sense, verify the legitimacy of vendors, stay away from their bank accounts and report blackmail and extortion attempts to law enforcement.

The FBI did not immediately respond to questions of what prompted the warning.

The warning is the latest government-level PSA over COVID-19 crypto scams, a ruinsome scourge apparently as globe-spanning as the virus itself. Thieves have stolen $2 million in crypto from panicking PPE-seekers in Asia, swarmed UK cellphones with malicious text messages, and spooked financial regulators, including the FCA and the SEC.

Whether these pandemic-themed scams are any more or less effective than their traditional counterparts is unclear. Chainalysis research indicated that crypto scammers are hitting their mark about as often as they did before the crisis, though their earnings have been dramatically lowered by bitcoin’s wild price swings.

FBI Director: Cryptocurrency Is ‘Significant Issue’ for Law Enforcement

Federal Bureau of Investigation Director Christopher Wray says cryptocurrency is a “significant issue” that is likely to become a “bigger and bigger” problem for the law enforcement agency.

Speaking in front of the U.S. Senate Homeland Security and Governmental Affairs Committee on Tuesday, Wray responded to questions from U.S. Senator Mitt Romney (R-UT) about cryptocurrency, law enforcement and terrorist deterrence, saying:

“We are looking at it from an investigative perspective, including tools that we have to follow the money even in this new world that we’re living in.”

Wray supported Romney’s line of questioning concerning terrorist financing, saying that U.S. adversaries are becoming “more facile with technology and particular various types of technology that anonymize their efforts.”

It’s not just crypto, however. Wray noted encryption is touching every aspect of emerging tech such as instant communications:

“Whether its cryptocurrency, whether it’s default encryption on devices and messaging platforms; we are moving as a country and world in a direction where if we don’t get our act together money, people, communication, evidence, facts, all the bread and butter for all of us to do our work will be essentially walled off from the men and women we represent.”

In 2018, the FBI said it had an estimated 130 cases involving crypto under investigation, from human trafficking to ransomware. And, this May, the FBI shut down DeepDotWeb, a dark web market place which solicited some services in cryptocurrency.

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