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Cryptomania: How Crypto Scams Emerged from a Financial Trend

Cryptomania may sound like an exaggerated term, but looking at the growth of interest in cryptocurrency since 2020, it seems appropriate. From the time the first digital currency was introduced in 2008, it received some attention, first peaking at 2017 and then dropping. However, 2020 was the time when cryptocurrencies truly captured the public’s imagination the world over. Although bitcoin has pulled back a bit since mid-2021, there is no doubt crypto is here to stay. 

Cryptomania, as the term suggests, is an intense enthusiasm about digital currencies. Trends fuel commerce and trade, but excessive excitement can lead to problems. First of all, getting very excited about a volatile and risky asset such as cryptocurrencies can lead to traders losing money with impulse buys and the desire to get in as soon as possible. 

The other problem with intense hype over cryptocurrencies is its tendency to encourage fraudulent parties to create crypto scams and take money from consumers. If you have lost money to a crypto scam, it is possible to recovery your funds. The blockchain poses significant challenges to fund recovery, but with the right experts, clients can improve their chances of getting their money back.

Professionals at Pengeretur provide information to consumers about credit card chargebacks, cryptocurrency refunds, wire recalls, and other fund recovery strategies. We advise clients on the chargeback process and the best ways to pursue fund recovery whether the issue is merchant or broker dispute or if the charges were unauthorized.

The Origins of CryptoMania

There was chatter about cryptocurrency since it was first invented, but it didn’t capture the imagination until the crypto market skyrocketed in 2017. Then, everyone was talking about cryptocurrency. Bitcoin ran in 2017 from $900 to $20,000. Naturally, everyone wanted to get in on the crypto game, including crypto scammers. 

As a result, in 2017, China shut down its big three crypto exchanges and US regulators cracked down on unauthorized ICOs because of high-profile frauds. In 2017, the plethora of crypto scams was responsible for bringing down cryptocurrency and as a result, digital currency had a shady reputation for several years. 

However, in 2020, the crypto market perked up again. The reason was a perfect storm created by the COVID-19 crisis, mainstream currency fluctuations, growing mistrust of government and regulations, as well as the increase in online financial activity. With many people out of work around the globe when the pandemic began in 2020, consumers had the time to re-discover cryptocurrencies.

 In addition, given the shutting down of many companies, people were looking for creative ways to make money online. Cryptocurrency was fueled by new ways to trade and purchase objects and as it rose in value during 2020, more people jumped in to avoid getting left behind. Unfortunately, that led many to be taken advantage of by crypto scams, which have increased in step with legitimate cryptocurrency services. 

The value of bitcoin increased from $10,000 to nearly $60,000 from October 2020 to April $60,000. However, bitcoin did not completely drop down and nearly out of sight as it did in 2017 but has corrected the way any asset would. Cryptocurrency fell in value partly due to Elon Musk’s stating concerns about the environmental impact of cryptocurrency and the natural correction of the asset.  

One thing is clear–this time bitcoin and other crypto currencies are here to stay. Recently, Coinbase, a cryptocurrency trading platform, went public on the Nasdaq in the spring of 2021. Lear Investment Management founder Rick Lear said of cryptocurrencies, “If you’re not talking about it, you’re really stuck in the past,” he told Marketwatch. “Having another currency creates a whole lot more problems, but it’s happening and you’ve got to be able to deal with it.” 

The Problem of Crypto Scams

Whenever there is a major trend, unfortunately, scams arise to cash in on the enthusiasm. The SEC has received 7,000 complaints about crypto scams in 2021, which is 12 times higher than it was the previous year. There are many reasons why crypto scams have increased so dramatically.

  • The popularity of cryptocurrencies–Cryptomania
  • Haste–the need to “get in quick”
  • Tapping into a general distrust in regulations and government oversight
  • Exaggerated stories about people making millions
  • The popularity of advertising financial products and social media
  • Manipulating confidence in celebrity endorsements

The first thing that contributes to crypto scams is the enthusiasm for crypto currency. Anything that is trendy will attract millions of people. Of these millions, scammers will then cast a wide net with hyped-up claims. Even if most people may stay away, these scammers will attract enough people to make it worthwhile. 

Given the need to get into cryptocurrencies fast before they increase in value, there is an urgency that will cause people to jump into these trades faster than they would otherwise. In this case, haste makes waste. Financial services should be regulated to be secure. However, in the current climate, there is a general distrust of government oversight.

Lack of regulation is one thing that attracts people to cryptocurrency, to begin with, however, this notion can be used by unregulated brokers as a way to alienate consumers from government bodies that can protect them. Crypto scams often use hyped-up language to attract consumers. They guarantee returns and claim that people make millions. Very few people do manage to make large amounts of money on volatile trades, but often they lose a few times before winning. The truth is cryptocurrencies are volatile assets and huge returns on the first try are unlikely. 

Another problem leading to the increase in crypto scams is the use of social media for financial services rather than secured websites. Scammers can be anonymous and hide on social media conveniently. In addition, they can impersonate celebrities and create a fake endorsement or can also hack high-profile accounts. 

If you have lost money in a crypto scam, fund recovery is possible. Pengeretur professionals assist clients in fund recovery. We provide information about the chargeback process and tools that will help you analyze your situation and assess the best strategies for pursuing fund recovery. 

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Fake Broker Who Stole $3 Million Sentenced: 5 Tips to Spot Forex Scams

People trust brokers to make money, not take money. However, with forex scams or crypto scams, this is precisely what happens. Some forex scams seem obvious with extravagant claims, aggressive strategies for getting clients, unprofessional website content, and other red flags. However, more clever people behind forex scams play the long game and can create a veneer of professionalism only to betray their clients. 

If you have lost money to a forex scam, you will need a reliable fund recovery service. Professionals at Pengeretur provide information to consumers about credit card chargebacks, cryptocurrency refunds, wire recalls, and other fund recovery strategies. We advise clients on the chargeback process and the best ways to pursue fund recovery whether the issue is merchant or broker dispute or if the charges were unauthorized.

Anatomy of a Forex Scam

There are many forex scams, and regulators around the world have taken actions to prevent these frauds from taking advantage of consumers. The U.S. government takes the threat of forex scams particularly seriously and has shut down many of these frauds following the financial crisis of 2008 and since the passage of the Dodd-Frank Act of 2012. 

However, despite these efforts, many consumers are either not aware of the importance of working only with regulated brokers or feel indifferent in the face of the threat. Often forex scams use enticing language and huge promises as a way to persuade consumers to put aside their skepticism and take a chance to make large amounts of money. 

Kelvin O. Ramirez was one of the most “successful” U.S-based forex scammers and managed to steal $3 million from traders and investors before he was caught.  He operated under several aliases and created names for many fake forex trading opportunities which he advertised on social media platforms, particularly Instagram. 

Ramirez lured consumers in through social media promises outsized gains and “double your money” offers. Some of these forex scams involved trading services, such as actual trading, instruction, tools, and trading signals. 

He organized trading pools that allowed clients to trade forex in groups. Also, he offered software which he promised would provide 100% returns for $250 monthly. Ramirez also gave clients access to trading signals for as much as $25,000. However, the software, signal services, and trading were all fake. All of the money went right into Ramirez’s account and was used for running his forex scams and his personal use. 

Fortunately, the CFTC or the Commodity Futures Trading Commission raised the alarm based on their investigation into the many complaints they received. The CFTC brought a case against Ramirez, who never appeared in court or responded to the charges and the complaint. A Texas federal judge has demanded a $2.2 million penalty and Ramirez could face 20 years in prison for wire fraud as well as a fine of $750,000. 

In addition, the CFTC is actively involved in recovery funds for clients of Ramirez. They thought they were devoting their money to a legitimate forex trading service and instead, this forex scammer used the money for his own purposes. Given the high profile and reliability of the CFTC and the fact this fraudster was caught, there is reason to believe that fund recovery, in this case, will be successful. 

How to Avoid Forex Scams

There are many takeaways from the Kelvin O. Ramirez forex scams. Most importantly, consumers should beware of the following:

  • Unregulated brokers
  • Impossible claims (i.e. “double your money”)
  • Reliance on social media rather than a secure website
  • Lack of transparency and proof of who is behind the service
  • Aggressive marketing tactics, including excessive haste

The forex scams masterminded by Kelvin O. Ramirez carry many hallmarks that can be observed in a variety of frauds. Many of these consumers could have avoided losing money if they had ensured the financial service was licensed. All brokers should have licenses and financial services, such as software should have some proof of legitimacy. Without a license, there is very little oversight.

 In this case, clients were lucky that the CFTC stepped in, but they were only able to do so after many complaints were made. If these services had been regulated, problems and disputes could have been kept to a minimum and dealt with sooner.  

Consumers should stay away from any deal guaranteeing that it will “double your money.” any level of guaranteed returns with an asset as risky as forex is questionable. Providers of financial services can give a general idea of what people can expect to make, but these should not be promised. 

Many forex scams and crypto scams take place on social media. It is much easier for fake brokers to hide on social media, to create personas, and block people they have cheated than on a secured website. Every trading product or broker should have more than a social media page but should have a secure website. 

Consumers should research who is behind the service. They should find the identity of the broker or person and be able to verify all information. Staying safe from the beginning may involve keeping far away from aggressive marketing tactics. Urging extreme haste is one tactic used by forex scams. The idea is that the consumer will be rushed out of doing the research required for making wise decisions. 

Despite taking precautions, some consumers will fall prey to forex scams. If you have lost money to a fraud broker, a fake financial service or have a dispute, discuss your choices with fund recovery companies. 

There is a chance that even if you follow these precautions you still may fall victim to a forex scam. If this happens, report the crime and seek guidance from expert fund recovery services. 

Pengeretur professionals assist clients in fund recovery, particularly with chargebacks. We provide information about the chargeback process and tools that will help you analyze your situation and assess the best strategies for pursuing fund recovery. 

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Global Covid Benefits Scams: How to Spot Them and What to Do

The COVID crisis has affected almost everyone around the globe. Small businesses were shuttered for weeks or months and many people could no longer work because of shutdowns. With a second wave of the COVID crisis, there is much uncertainty and governments are providing benefits to individuals and small business owners to allay any hardship caused by a shortfall. 

However, many of these benefits payments never reached their intended recipients. COVID benefits have been a virtual goldmine to crypto scams and some of the most notorious fraudsters have called retrieving benefits from other people “easy money.” 

If someone else has claimed your benefits, there is hope for fund recovery. Professionals at Pengeretur provide information to consumers about credit card chargebacks, cryptocurrency refunds, wire recalls, and other fund recovery strategies. We advise clients on the chargeback process and the best ways to pursue fund recovery whether the issue is merchant or broker dispute or if the charges were unauthorized.

How Widespread Are Covid Benefits Scams? 

The United States government issued $900 million in benefits to provide relief for Americans who found themselves out of work or who faced increased expenses as a result of the pandemic. 

Of the $900 million issued, it is still uncertain how many were stolen, but experts estimate it may be between $80 million and $400 million. This is staggering and is a testament to the huge number of cybercriminals out there and the ease with which they can fake consumers’ identities to carry out these benefits scams. 

How Do Covid Benefit Scams Work? 

One of the largest networks of Covid benefit scams was masterminded by Abedemi Rufai a Nigerian government official. The FBI got a warrant for Rufai’s files which revealed a massive theft of sensitive information of consumers, including tax and social security details, and a total of $350,000 stolen from consumers. 

Rufai’s Covid benefit theft was one of many scam networks intended to defraud consumers around the world. Part of the problem is the weakness of verification systems in place that can let scammers get through. The other problem is the sheer scope of cyber fraud and the increasing skill with which these scammers seize information and claim benefits. 

The first step in any benefit scam is to get information from the target. Scammers may hack websites that can contain sensitive data such as eCommerce sites or social media platforms. Once they have this information, they can collect the benefits from the person without their knowing about it. 

However, getting information purely through hacking may be incomplete. For instance, just having some contact information or even a social security number may not be enough to secure someone else’s benefits without a photo ID. Sometimes, the easiest way a scammer can get all of the information they need at one time is through phishing. 

Phishing allows scammers to get all of the data they need from the consumer so they can quickly get benefits. The cybercriminal will contact the intended target through the telephone, email, or text. They may claim to be from a government office and have logos and headings on an email that may look identical to actual government emails. The scammer will impersonate a government official and ask for verification of data. Once the consumer fills in a fake form or gives the data directly, 

Once the Cybercriminal has this information, they can go ahead and claim the funds. The victim often doesn’t find out until they do not receive their benefits, contact a government office only to find out that the benefits have already been claimed. 

How to Avoid Covid Benefits Scams

What is staggering about benefits scams is how widespread they are and how easily they take money from clients. With phishing scams, you can more easily see the signs because you are contacted directly by the scammer. Here are some ways to avoid Covid benefits scams

  1. Adopt best practices for internet use–don’t duplicate passwords, use a 2 step verification system,  only work with secure website update anti-virus software
  2. Do not provide sensitive information on the phone
  3. Do not click on links in an email 
  4. Verify all information from those who say they work for government offices
  5. Contact the government office directly

Keeping your information safe from hacking will protect you from many types of cyberfraud. Adopt best practices for cyber security. Update your anti-virus software, use one password per platform and change the passwords regularly. Use a 2-step verification system for added security. These practices can take only a few minutes or seconds but they can make all of the difference between having your data hacked and keeping it safe. 

Avoid cold-calls. Government offices in the 21st century will not cold call you. If you want to talk on the phone with them, at least ask for their number and call them back. Verify the phone number with the one listed on the government site. In fact, verify all of the contact information you are given. If you are sent an email by what seems to be a government office, be skeptical. Do not click on links directly in the email or download documents. 

If you need to verify your information to receive your funds, take the initiative and contact the government office to confirm that this is the case. If you need to update your information, do so only on a secure website, never on the phone, in an email, or a text. 

There is a chance that even if you follow these precautions you still may fall victim to a benefits scam. If this happens, report the crime and seek guidance from expert fund recovery services. 

Pengeretur professionals assist clients in fund recovery, particularly with chargebacks. We provide information about the chargeback process and tools that will help you analyze your situation and assess the best strategies for pursuing fund recovery.