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Deep Dive: Cryptocurrency is rising in popularity driving record investments and scam losses

Americans lost $80 Million since October 2020
Cryptocurrency is rising in popularity, investments, and scam losses
Posted at 4:47 AM, Jun 03, 2021
and last updated 2021-06-07 10:23:50-04

COLORADO SPRINGS — Have you heard of cryptocurrency? Some people believe online currency like Bitcoin will be the currency of the future. Investing in it, they are making money off of it as more people start to believe in its value. News5 is learning as the popularity of cryptocurrency increases, so do the number of scams.

Cybercriminals are finding ways to drain people’s cryptocurrency accounts in a matter of seconds and there’s no easy way for victims to recover their funds.

The Federal Trade Commission says cryptocurrency investment scams have cost Americans more than $80 million since October 2020. 44% of the victims are between the ages of 20 and 39. The FTC says victims lose an average of $1,900.

The Vidovic family learned the devastating impact of having their cryptocurrency wiped out. They had no idea their’s was at risk until someone drained cryptocoins worth nearly $170,000 from their online account.

Criminals hacked the Vidovics’ coinbase account using something called a “sim swap”. Someone contacted Tanja’s cell provider and pretended to be her and had her sim card containing her pictures, contacts and apps electronically transferred to a new phone. Allowing the crooks to use two-factor authentication to access her Coinbase account.

"The money we were looking forward to after we retire is gone. probably two-and-a-half years of my salary is gone," said Tanja Vidovic. "They were able to make these changes and transfer all of our money via this app over to their wallet in an instant."

Retired federal agent and cybersecurity expert Gus Dimitrelos says cryptocurrency theft is one of the fastest-growing cybercrimes.

"There is no FDIC for the crypto world. you’re on your own. it’s still the wild, wild west," said Dimitrelos. "Someone can steal your money without any recourse. you can’t call the fraud department because it does not exist. and if you can get law enforcement to help you, all they can do is trace back these transactions to most likely foreign countries."

Dr. Erik Huffman works in the Pikes Peak Region and has studied the dark web and the role of cryptocurrency. A flurry of cryptocurrency fraud investigations are underway, but unlike banks and credit card companies, cryptocurrency exchanges don’t have adequate policies to address fraudulent transactions. Dr. Huffman says criminals taking this digital money are getting rich.

"You can pay someone via cryptocurrency and the irs just can't get their hands on there to find out where it's going," said Dr. Huffman. "They are making just an insane amount of money and it's growing because you look at cryptocurrency it's growing and what cryptocurrency was five years ago is now worth significantly more."

Attorneys and private investigators are working to try to help victims of these types of cryptocurrency crimes, but as of right now it's rare for phone companies, or cryptocurrency exchanges to help victims financially.

To report cryptocurrency scams, ask questions to fraud experts, and to learn more about these scams and how they work, please visit this section of the FTC website: