(WWJ) -- Michigan Attorney General Dana Nessel is warning Michiganders about scams involving cryptocurrency.
Along with the Michigan Department of Licensing and Regulatory Affairs (LARA) and Department of Insurance and Financial Services (DIFS), Nessel issued an alert Monday “to help Michiganders protect themselves when using (or investing in) cryptocurrency instead of currency issued by the U.S. Treasury."
The alert explains the basics of cryptocurrencies, as well as some scams that aim to take advantage of people unfamiliar with using them.
Nessel’s office noted a recent article from the Wall Street Journal estimates the value of the total cryptocurrency market is more than $2 trillion -- a massive increase from $260 billion about a year ago.
Officials are offering some important tips for anyone interested in investing in cryptocurrency:
Research before you invest -- “Search online using the company name as well as the cryptocurrency name; add “review,” “scam,” or “complaint” to your search.
Never wire or provide any credit card or bank account information until you check out the investment first.
Before using a digital payment app, such as Venmo, make sure you understand the terms and conditions of using and transferring different currencies through the app. Some may charge a fee when the user wants to transfer money to their bank.
Be careful when you see a celebrity endorsement. Scammers will use popular names and faces for curb appeal.
“As cryptocurrency popularity grows, so will the prevalence of scams,” Nessel said in a press release. “Bad actors running investment scams are always looking for new ways to target unsuspecting investors. It’s so important to do your research before you invest in anything, including determining how and if you will have the option to transfer digital earnings to your bank. Otherwise, you may lose money instead of earning it.”
LARA Director Orlene Hawks says, “as with any type of potential investment, if a promoter guarantees returns, if an opportunity sounds too good to be true, or if you are pressured to act quickly, please exercise extreme caution and be aware of the risk that your investment may be lost.”
DIFS Director Anita Fox says sometimes new innovations in the tech world can inspire new scams.
“But good old fashioned vigilance can help protect you, your money, and your personal information,” Fox said. “It pays to do your homework with reputable sources before initiating a transfer or giving out any personal information, and remember that if an offer seems too good to be true – it could be a scam.”
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Consumers who need assistance with insurance or financial services issues can contact DIFS Monday through Friday from 8 a.m. to 5 p.m. at 877-999-6442 or file a complaint online.
Any consumer complaints can also be filed online with the Michigan Attorney General’s Office.