(WXYZ) — Cryptocurrency is still a relatively new and novel investment, and yes, it can be risky.
Some financial advisors don’t recommend investing in it at all. Even so, this digital medium of exchange is out there, and scammers are trying to capitalize on it.
A grandmother in Wyandotte shared her experience with me, and I want to make you all aware, so you don’t waste your money.
Beth Carmona, 71, said a Facebook page of a man named Rasheed Smith listed him as a cryptocurrency investor with more than $100,000 in sales.
“Somebody posted what he was doing for them. Because what he wants you to do is once you start investing in him and you get to a certain plateau – like $5,500. Then he wants you to take a picture, tell everybody what great job he did,” Carmona said.
He claimed to have a long list of credentials and communicated with her via messenger, email, and WhatsApp.
“When was the first time you sent him money?” I asked Beth.
“Oh, within a week,” she said, adding she first sent him $200.
She kept investing, receiving images of what she thought was her growing Bitcoin nest egg. One said $194,000.
“When did you first think, ‘Oh, goodness, this might be a scam?” I asked.
“When they kept asking for more money, and I wasn’t getting funded,” she said. “Well, there’s been a delay. The account’s been hijacked, you have to pay taxes.
Excuse after excuse, she ended up losing close to $10,000.
She reported the scam to the Better Business Bureau. In this case, no cryptocurrency was ever really purchased.
“You’re just paying the scammer directly, and they’re able to fabricate it so that it looks like you can view, you know, a large amount of money you have sitting in a bank or a cryptocurrency exchange,” Ashley Gibbard of the BBB of Eastern Michigan said.
She said they have received half a dozen cryptocurrency scam complaints since the beginning of this year.
Gibbard recommends you search for registered brokers on “BrokerCheck” by the Financial Industry Regulatory Authority, which is a non-profit organization overseen by the U.S. Securities and Exchange Commission.
Rasheed Smith is nowhere to be found on BrokerCheck, but when our team did a reverse image search, Jason O’Neil popped up. He’s a self-described husband, father, and e-commerce entrepreneur in Jacksonville, Fla. I reached out to O’Neil for comment but have not yet heard back.
“It’s heartbreaking, you know. You save money, you know, and we had things planned for that money,” Carmona said.
Beth said she had been saving to take her family to Disney World, a dream trip she and her late husband had always wanted to do. So, she’s understandably upset, and wanted to share her story to help other people spot these scammers.
The bottom line: Don’t make an investment based on a social media post or message. Do your own research and find a registered financial broker or firm, and don’t invest money you can’t afford to lose.