Oregon officials warn of fake crypto apps, websites that want to steal your money

SALEM, Oregon (KTVZ) – The Oregon Division of Financial Regulation on Tuesday warned cryptocurrency investors to do their homework before giving money to any cryptocurrency trading platform.

Many cryptocurrency apps or websites are actually just fake platforms set up by scammers to take investors’ money and give nothing back, the agency said.

Investors are promised huge returns in a short amount of time and will see account balances increase rapidly, but will be unable to withdraw funds without having to deposit more money in “withdrawal fees” or “fees”.

The scammer will keep extorting these fees until an investor becomes suspicious. Subsequently, the account is emptied and the scammers leave, along with the investor’s funds. Before transferring money to a cryptocurrency trading website or app, research the company and web address to make sure it’s legitimate.

Fraudsters will also look for opportunities to re-victimize those who have already been harmed and are trying to find ways to recoup their losses.

For example, a recent scam involved a website claiming to be run by the US State Department, claiming it was working to get FTX clients’ assets back, following the FTX crash (read more on the crash of FTX). The website asked for the investor’s FTX username and password, along with other account information.

The US Department of State did not create this website. Please note that if someone contacts you asking for usernames and passwords for your accounts, it is very likely a scam.

“The cryptocurrency trading market is fluid and full of people looking to take advantage of you,” said TK Keen, director of DFR. “We’ve said it before, but if it sounds too good to be true, it probably is. We encourage everyone to do their homework and invest wisely and be diligent in protecting their usernames, passwords and other sensitive data.”

According to the North American Securities Administrators Association, there are many common schemes that fraudsters exploit as new products or investment opportunities. Some of them are:

  • Fake digital wallets: A digital wallet is used to store, send and receive cryptocurrencies. Fraudsters design a fake digital wallet to trick users into providing their private key or code that allows the wallet to be opened. Once the scammers receive the private key, they can steal all the cryptocurrency from the owner’s digital wallet.
  • Pump-and-dumps: Groups of individuals coordinate to buy a little-traded cryptocurrency, promote the cryptocurrency on social media to raise demand and price, then sell it in a coordinated sale. The price plummets and those unaware of the scheme are left with the devalued cryptocurrency.
  • Multi-Level Marketing Platforms: Firms lure investors with the promise of high interest at low risk. These investors are then incentivized to recruit more members.

“A lot of these seem obvious after the fact, but there’s so much in this industry that looks and sounds legit,” Keen said. “Unfortunately, there are many people out there in the crypto space who are just trying to take advantage of you. If you believe you are the victim of a cryptocurrency scam, please file a complaint with our office.”

For more information about filing a grievance, visit the DFR website.


About the Oregon DFR: The Division of Financial Regulation is part of the Department of Consumer and Business Services, Oregon’s largest consumer protection and business regulatory agency. Visit dfr.oregon.gov and www.dcbs.oregon.gov.​​

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