The FBI is warning of a rise in Bitcoin ransom scams in which scammers use scare tactics and extortion to squeeze money out of victims in the form of Bitcoin payments.
“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 warns.
Unfortunately, the cryptocurrency payment leaves no room for reclaiming the lost funds. Here’s all you need to know about these scams and how to best protect yourself.
How the scams play out
In some Bitcoin ransom scams, scammers hijack an email address associated with a business website and contact a client of the business. The email informs the victim that a hacker has found a vulnerability in the company’s website and is holding the victim’s data hostage until a Bitcoin payment is made for its release. The victim, fearing monetary loss, may comply with the scammer and make the payment. In reality, though, the scammer has only hacked into the company’s email database. They have no access to the customer’s sensitive information.
While the scammer can hijack any website that has access to clients’ sensitive information, financial institutions like Advantage One Credit Union, are especially vulnerable to this scam. We utilize strict protective measures, like encryption and updated security software to protect our members’ information, but fraudsters may still try to scam members by persuading them that their data is at risk of being exposed.
In another variation of the Bitcoin ransom scam, scammers use “sextortion” to take the victims for money. They’ll claim to have evidence of the victim engaging in questionable internet usage and threaten to share this information with the victim’s contacts unless a ransom payment is made immediately. Some criminals have taken this scam a step further during the COVID-19 pandemic. In addition to the threat of releasing the information they supposedly have on the victim, they’ll also promise to infect the victim and their family with the coronavirus unless a payment is sent to a Bitcoin wallet.
Fortunately, ransom scams are easy to spot. If you receive an email allegedly sent from a business you use, and it contains a message similar to what’s described above, do not respond. You can contact the company yourself to ask if there has been a data breach. You will likely learn there has not been any sort of breach within the company.
Similarly, if you receive an email threatening to expose your internet usage history and/or to infect you or your family with the coronavirus, do not respond. Mark the email as spam and delete it promptly.
If you’ve been scammed
Unfortunately, cryptocurrency transactions pose an extra risk by being absolutely final. There’s no way to cancel a cryptocurrency payment, back out of a purchase or trace the Bitcoin wallet to its owner.
However, if you believe you’ve been targeted by a Bitcoin ransom scam, you can help prevent others from falling victim by reaching out to the appropriate authorities.
If the scammer posed as representatives of Advantage One Credit Union, be sure to let us know! We’ll send out a warning to all of our members and caution them not to respond to any emails claiming to have hacked our database or to have accessed our members’ sensitive information. If the scammer is posing as a representative of a different company, it’s a good idea to let them know about it, too.
It’s equally important to alert law enforcement agencies about every scam attempt. The FBI’s Criminal Investigative Division has a team that’s dedicated to preventing and fighting cryptocurrency laundering and fraud. If you are the victim of a cryptocurrency scam or you’ve been targeted by one, be sure to contact your local FBI field office or visit the bureau’s Internet Crime Complaint Center . You can also alert the Federal Trade Commission at FTC.gov.
Many people are struggling with financial hardships due to the economic fallout of COVID-19. Unfortunately, scammers are trying to make a difficult time even harder by extorting victims for money. Stay alert and stay safe!
Have you been targeted by a Bitcoin ransom scam? Tell us about it in the comments.