Cryptocurrency Investment Scams (2024)

What is Digital Currency?

Digital currency istheoverall term for all non-physical, electronic monies, including cryptocurrency and virtual currency. It is money that is mainly managed, stored, or exchanged on the internet.

While you cannot touch digital currency physically, you can actually use the "money" to pay for services, buy goods and carry out transactions. Digital currency typically does not need intermediaries, such as banks, to execute transactions. Transfers between users require only the use of an email address and digital wallets.

This makes it easy for one person to transfer money to another, with the transactions often reflecting within minutes. Basically, digital currencies are real money that are intangible, but still very usable.

What is Virtual Currency?

Virtual currency isasubset of digital currencies, often restricted to certain platforms and communities online. These are often created by individuals or entities with platforms where it can be traded and accepted. So, unlikedigital currenciesthat are universally accepted, these are only accepted in individual online communities.

So, while virtual currencies are digital (intangible), not all digital currencies are virtual. An example of virtual currency is the rewards you get from playing certain video games. While you can actually acquire billions in value, that "money" is only good for buying and selling within the gaming community.

It's NOT a legal tender in the outside world. So, outside of that platform, it's essentially useless. These are never issued by traditional financial institutions as they have no need for it. This also means zero regulation.

What is Cryptocurrency?

Cryptocurrency is a type of currency that generally only exists electronically. There is no physical coin or bill unless you use a service that allows you to cash in cryptocurrency for a physical token. You usually exchange cryptocurrency with someone online, with your phone or computer, without using an intermediary like a bank.

Bitcoin is a well-known cryptocurrency, but there are many different cryptocurrency brands. Anyone can create a cryptocurrency and currently, there are about2000 cryptocurrencies, many of which are scams. This makes it difficult to identify the best and most promising tokens from the legit ones. Cryptos areknown for their anonymity,trustlessness,lack of transparency, and zero reliance on third parties and privacy -although some aren't as private as others. Central banks and other governmental authorities do not insure or control cryptocurrencies.

Cryptocurrency is stored in a digital wallet on your electronic device, and can be used for quick payments, to avoid transaction fees that regular banks charge, or because it offers some form of anonymity. Others invest in cryptocurrencies as they would other assets, but it can be risky and requires research to fully understand.

Cryptocurrency Investments

Do your homework - you should know what you are getting into. As with any investment, you should thoroughly researchdigitalcurrency before investing your hard-earned money.

Cryptocurrency has gotten lots of attention as a new way to invest, but keep in mind, scammers are taking advantage of people's understanding (or not) of crypto investments and howthey work. As the popularity - and price - of cryptocurrency continues to rise, so do the online scams associated with those digital currencies.When there are large amounts of money to be made or lost, that is when scammers come in.

Report fraud and other suspicious activity involving cryptocurrency to: