Consumers Beware: With Bitcoin Trading Solidly Over $90,000 This Month, Cybercriminals Will Be Circling the Wagons

Scammers "love, love, love to leverage external events, create confusion, create that sense of urgency and steal your hard-earned money."

With bitcoin trading at record highs and showing no signs of slowing down, fraudsters are circling the wagons, hoping to capitalize on the crypto craze and ensnare unsuspecting victims.

The FBI's Internet Crime Complaint Center received more than 69,000 complaints last year related to cryptocurrency fraud, with estimated losses topping more than $5.6 billion. The losses associated with these complaints accounted for nearly half of the total fraud losses reported.

Here's how to recognize and avoid the latest crypto scams.

'Elon Musk is not going to double your money'

Prevalent scams today include fake bonuses in exchange for an initial investment, bogus coin promotions, phishing emails or texts that appear to come from reputable crypto companies or exchanges, Ponzi and pyramid schemes, or "Pig butchering" scams that involve fraudsters building trust over time, often posing as friends or romantic partners, before convincing victims to invest in fake crypto platforms.

Coinbase is seeing several scams in which cyber thieves send a text claiming a crypto owner's account has been compromised. If the user responds to the text, scammers try to pry additional information such as the crypto owner's seed phrase, which allows the thieves to empty the account, said Jeff Lunglhofer, chief information security officer of Coinbase. People fall for this because it all seems plausible and the scammers convince them their assets are at risk, he added.

If you get a text or an email claiming there's a problem with your crypto account, don't respond or click on any links. Instead, go directly to your provider's website or call the phone number you know is attached to the provider to inquire about your account, said Merrick Theobald, vice president of marketing at BitPay, a cryptocurrency payment service.

Coinbase warns scammers will prey on your fear

Fraudsters also use fear to ensnare victims.

Coinbase is seeing several scams in which cyber thieves send a text claiming a crypto owner's account has been compromised. If the user responds to the text, scammers try to pry additional information such as the crypto owner's seed phrase, which allows the thieves to empty the account, said Jeff Lunglhofer, chief information security officer of Coinbase. People fall for this because it all seems plausible and the scammers convince them their assets are at risk, he added.

If you get a text or an email claiming there's a problem with your crypto account, don't respond or click on any links. Instead, go directly to your provider's website or call the phone number you know is attached to the provider to inquire about your account, Theobald said.

Be skeptical of one-time promotional offers

Scammers sometimes send emails or place ads on social media, offering one-time promotions for investing in crypto. These ads often look like legitimate offers from reputable companies that people may be familiar with, or have done business with in the past, said Howard Greenberg, president of The American Blockchain and Cryptocurrency Association, a non-profit trade association.

But there might be a letter missing in the URL and if you click on it, you'll see something that looks very much like the homepage of the reputable site, confusing people more, Greenberg said. In reality, crypto owners are plugging in their credentials on a fraudulent site. "Before you realize you've signed on to a fake site, your money is gone," Greenberg said. "There's no way to do a dispute like you can with a credit card."

To avoid this problem, he recommends people bookmark the websites of the legitimate providers they use. This way, investors can go there directly to purchase crypto and they don't accidentally fall for a scam by clicking on someone else's link. In addition, he recommends people only buy crypto on reputable exchanges, which include Coinbase and Gemini. "You don't want to be using a fly-by-night exchange out of Liechtenstein," Greenberg said.

How families get defrauded

There's the adage, "If it sounds too good to be true, it probably is," but when it comes to crypto scams, people still take the bait. Sometimes it's because they don't recognize the warning signs. These include offers that seem too good to be true, pressure tactics or unrealistic promises for returns. A little homework can save a lot of money and headaches, industry professionals said.

Yaya Fanusie, director of policy for anti-money laundering and cyber risk at the Crypto Council for Innovation, had a family member recently defrauded by a crypto scammer. The company, supposedly founded by a well-known mathematician, advertised a guaranteed investment return of 150%. Fanusie did some digging on the relative's behalf and found the supposedly famous mathematician had only a few dozen followers on LinkedIn. Fanusie was also suspicious due to the lofty investment guarantee and because his relative was being asked to communicate with the company on What'sApp, which is end-to-end encrypted and offers scammers extra protection.