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Scammers are capitalizing on cryptocurrency’s record-breaking year, luring victims with fake investment opportunities that promise huge returns. Victims watch their balances soar, until they try to cash out.
Losses tied to these schemes have grown so severe that the FBI launched Operation Level Up in January 2024, a proactive effort to identify and warn victims before they realize they are being scammed.Karen and Michael, who asked to be identified by their first names only, both started small. Their investments appeared to multiply almost immediately. But the profits only looked real on screen. The platforms showing those gains were controlled by scammers, and the money was never invested.“I started out with about $2,000,” Karen said.“I decided, why not 500 bucks if it doesn't work? And lo and behold, I made money,” Michael said.RELATED STORY | Banks, FBI warn of rise in scammers posing as employees to steal your moneyThat early success convinced Karen to keep investing.“It seemed so easy to make that much money, you know, in that short period of time, and my greed just went into full bloom,” Karen said. “I pretty much invested a lot, I would say like, maybe over $3 million.”But when both tried to withdraw their money, they were stopped. Scammers demanded additional payments, often framed as taxes, before allowing access to the funds.“You have to pay some sort of tax in order to pull it out. But in order to do that, you have to pay like, 20%, 30% of what you made,” Karen said.Neither recovered their money. Michael lost $50,000. Karen lost everything.“Once you fall into that initial trap, it's kind of hard to get out,” Karen said.So hard that when the FBI reached out to warn her, Karen did not believe it was real.“I got an email from the FBI saying, you know, we're seeing a lot of activity with your account, and we think you might be, you might be being scammed. And when I first saw the email, I thought it was a scam,” she said.Keith Custer, supervisory special agent with FBI Baltimore, explained the bureau's new approach.“Operation Level Up. So this is an initiative that the FBI started in January of 2024 where we proactively identify victims who are in the midst of being scammed,” Custer said.RELATED STORY | Fake airline customer service scams are canceling real flights and draining millions in loyalty pointsThe goal is to stop catastrophic losses before they happen. Custer said the average loss in these cases is about $140,000.“In 2024, which is the last year that we have full year records for IC3, the Internet Crime Complaint Center received reports totaling $5.8 billion in losses and over 41,000 individuals reported complaints,” he said.Many of these scams begin with a simple message, sometimes an accidental text, sometimes through social media or dating apps.“There's no initial ask. The scammer will attempt to build a relationship based on kind of an accidental meeting. And they'll take whatever amount of time is required to develop a level of trust,” Custer said.That relationship-building phase can last months. After victims lose their money, scammers often return, this time posing as recovery services.“They will then contact the victim with what we would call a recovery scheme and purport to be a law firm or another firm that can assist them in unlocking these millions of dollars that don't really exist,” Custer said. “It's hard psychologically for a victim to come to grips with I've just lost everything, and hold on to that little hope that maybe one more transaction can unlock everything and get them back.”WATCH | How fake online retailers use social media platforms like TikTok to scam consumersThe FBI says Operation Level Up is working. In less than two years, Custer said the effort has prevented more than $400 million in losses.For anyone considering an investment, the FBI urges people to slow down, talk it over with someone they trust, research the company, look for complaints, and confirm the business and promoters are properly licensed or registered.Custer also warns that artificial intelligence is making these scams more convincing, and that in the near future, much of the process could be fully automated using chatbots.For more information on investing and avoiding fraud, visit Investor.gov, a U.S. Securities and Exchange Commission website. Scams can also be reported to the FBI's Internet Crime Complaint Center — IC3.
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