COVID-19 ISO Insights

FBI Warns About Cryptocurrency and Other Scams During COVID-19 Crisis

April 27, 2020

By: Christopher Sirota, CPCU

The Federal Bureau of Investigation (FBI) has issued a press release regarding cryptocurrency scams related to the COVID-19 outbreak that may occur via online accounts and via the "thousands" of globally located cryptocurrency kiosks.

According to the press release, the FBI warns about an increase of blackmail, employer impersonation, virus treatment and equipment payment fraud, and investment and charitable donation scams during the COVID-19 crisis.

Specifically, per the press release:

  • Black mail: for example "correspondence [from a scammer may claim] that the writer will both release your information and infect you and/or your family with coronavirus unless payment is sent to a Bitcoin wallet."
  • "Work from Home Scam": Posing as an employer, a scammer may ask a worker at home to deposit a donation at a cryptocurrency kiosk. Since the money is mostly likely stolen, if transacted it may be "considered illegal money mule activity and potentially unlicensed money transmission."
  • "Paying for Non-Existent Treatments or Equipment": "Scammers have been known to lure customers from trusted e-commerce sites offering products that claim to prevent COVID-19 onto unrelated and unregulated messaging sites to accept payment in cryptocurrencies for products that do not actually exist."
  • Investments/Charitable Donation Scams: The FBI suggests any pressure to use a cryptocurrency in these cases “should be considered a red flag."

Other COVID-19 Related Scams: Social Engineering

In a separate press release, the FBI warns about fraudulent offers for Personal Protective Equipment (PPE) to the healthcare industry.

According to the press release, there have been multiple incidents of fraud during attempts to procure PPE by state governments. These incidents reportedly involved pre-payment for items to fraudulent brokers and sellers.

The press release explains that:

The current environment, in which demand for PPE and certain medical equipment far outstrips supply, is ripe for fraudulent actors perpetrating advance fee and business email compromise (BEC) schemes […].

The press release lists the following which may be indicators of potential fraud:

  • "A seller or broker initiates the contact with the buyer, especially from a difficult to verify channel such as telephone or personal email.
  • The seller or broker is not an entity with which the buyer has an existing business relationship, or the buyer’s existing business relationships are a matter of public record.
  • The seller or broker cannot clearly explain the origin of the items or how they are available given current demand.
  • The potential buyer cannot verify with the product manufacturer that the seller is a legitimate distributor or vendor of the product, or otherwise verify the supply chain is legitimate.
  • Unexplained urgency to transfer funds or a last minute change in previously-established wiring instructions."

Other COVID-19 Related Scams: Healthcare

In a separate press release, the FBI warns that scammers are falsely offering healthcare related services.

According to the press release, there have been scammers that have offered phony healthcare services in order to obtain personal information and scammers asking for payment for phony medical services and treatments.

Specifically, per the press release:

  • Fraudulent COVID-19 Tests: scammers may contact victims by phone or email saying that the government requires COVID-19 testing and that the victim needs to provide them healthcare insurance information like a Medicare or Medicaid number. Scammers may also simply try to sell a phony COVID-19 test.
  • Fraudulent Treatments: scammers have been "working hard to sell fake cures, treatments, and vaccines". Scammers may also pose as a medical professional and demand "payment for treating a friend or relative for COVID-19".