GRAND RAPIDS, Mich. (WOOD) — A new study published by the Better Business Bureau found scams involving cryptocurrencies are on the rise. Yet, many consumers aren’t aware of the tactics used by fraudsters.

In the spring of 2020 when the world slowed down for COVID-19, Jim Burdick from Rockford started researching crypto and investing.

“Very small amounts at first,” Burdick said. “A few dollars a week but consistent and with the market rise that grew to what was a sizable amount for me.”

He got in on the ground floor and then began looking for a more stable investment.

“I moved my currency off an exchange and into a wallet. So having a wallet, I owned the responsibility for maintaining my private keys,” he said.

With that move came a “smart contract,” and that’s where things started heading south for Burdick. He’s not alone.

BBB said the number of reports it received involving cryptocurrency has tripled in the last three years, with 2,465 complaints reporting a monetary loss in 2021. However, the study notes the actual number may be much higher as most fraud victims do not report it.

Burdick thought he had control because he held the private keys: the passwords. He was wrong.

“They took my money out of my wallet and put it into this smart contract where they said if I didn’t give them a very large amount of money to fulfill this smart contract term, they were going to take all my money,” he said.

With the increasing popularity of cryptocurrencies, like Bitcoin, criminals are now using these digital payment systems to get money from victims. The study found many victims of ransomware attacks, Ponzi schemes and romance scams reported being tricked into using cryptocurrencies.  

“My money was swept out of my account,” said Burdick.

Burdick reached out to the Michigan State Police, the BBB and the FBI Internet Crimes Divisions — to no resolve.

“There’s wonderful communities out there that are self-governing and unfortunately with that self-governance, there’s a couple bad apples out there,” Burdick said. “Nobody’s really taken jurisdiction of this.”

In the study, BBB provided several tips for consumers to avoid cryptocurrency scams, including the following:

  • If you buy cryptocurrency, make sure to guard your codes, also called “crypto wallet.”
  • Look carefully at email addresses, website addresses and links to avoid becoming the victim of phishing scams.
  • Be careful when someone asks you to pay for products with cryptocurrency.
  • Don’t trust celebrity endorsements and claims on social media.
  • Only download apps from Google Play or App Store.

The full study can be found on BBB’s website.

“Hopefully sharing this story with you and other folks out there, they can learn the good and the bad that can be accomplished with this technology,” Burdick said. “Educate yourself, read a lot and don’t believe anything that someone will just tell you.”

The full study can be found on BBB’s website.