As cryptocurrency continues to rise in popularity, so do the opportunities for scammers. October is Cybersecurity Awareness Month – a great opportunity to take stock of some of the current crypto scams. While most credit unions may not yet be heavily engaged in the cryptocurrency sphere, now is the time to provide educational materials to your members and employees about the dangers of crypto scams.
Cryptocurrency offers great promise to speed up payments and reduce friction. Money can move at the speed of blockchain – typically minutes – as opposed to next-business-day timeframes for Automated Clearing House (ACH) Network. Payments made via cryptocurrency do not require a credit union or bank account. On the downside for consumers, cryptocurrency transactions are irreversible while credit and debit card transactions can be disputed.
For these same reasons, cryptocurrency is very attractive to scammers. Since there are no credit unions or banks involved, there is no authority to flag suspicious activity. Given its irreversibility, even if a victim of a scam figures out that they have been scammed, or at least becomes suspicious, it’s usually too late. The old expression “possession is nine-tenths of the law” doesn’t hold true here. Once the scammer gets the cryptocurrency, it’s 100% gone. Couple that with the fact that there is far more interest than there is understanding when it comes to this new digital currency, the cryptocurrency sphere is a scammer’s dream playground.
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