Remember the transgender Satanist that ran for sheriff in 2020? No worries, they lost anyway but have still managed to resurface in the news after being arrested recently. As a candidate, Aria DiMezzo was a polarizing figure that divided the LGBTQ+ community. While some were encouraged to see a transgender individual penetrating the political scene, others felt that they were sending the wrong message about being LGBTQ+ as the candidate’s values diverged from many of their own values. In recent news, Aria DiMezzo has been arrested after being implicated in a scheme involving virtual currency. The 35-year-old facilitated transfers that moved nearly $3 million in cryptocurrency. After being caught operating an unlicensed money transfer business, they had to surrender a great deal of money, including 1.93 bitcoins which were worth well over $50,000. This story reminds us of the dangers of playing with virtual currency. If you do it improperly, you could wind up on the wrong side of the law, and if you do it carelessly, you could find yourself fresh out of dough.
Reviewing the Risks of Virtual Currency
Cryptocurrencies, such as Bitcoin, Ethereum, and Dogecoin, have become increasingly popular over the past decade, with many people investing in them as a way to diversify their portfolios and potentially make a profit. However, despite their growing popularity, cryptocurrencies are not without their dangers and risks. One of the most significant risks associated with cryptocurrencies is their volatility. Cryptocurrencies are not backed by any government or central authority, which means that their value is entirely determined by supply and demand. This can lead to significant fluctuations in price, with some cryptocurrencies experiencing massive price swings in just a matter of hours. For example, in 2021, the value of Bitcoin dropped by nearly 50% in just a few weeks, causing panic among investors. Another danger of cryptocurrencies is their susceptibility to fraud and scams. Cryptocurrency exchanges, where users can buy and sell cryptocurrencies, are largely unregulated, making it easier for scammers to set up fake exchanges and steal users’ funds. Additionally, many scammers use phishing scams to trick users into giving them access to their cryptocurrency wallets.
Furthermore, the anonymity of cryptocurrencies can make them attractive to criminals. Cryptocurrencies are often used for illegal activities, such as money laundering, drug trafficking, and terrorism financing, due to the difficulty in tracing transactions back to individuals. This has led to increased scrutiny from law enforcement agencies and regulatory bodies, which can have a negative impact on the overall legitimacy of cryptocurrencies. Another risk associated with cryptocurrencies is their reliance on technology. Cryptocurrencies are entirely digital, meaning that they are vulnerable to hacking and cyber-attacks. In 2014, the cryptocurrency exchange Mt. Gox was hacked, resulting in the loss of $460 million. Similarly, in 2016, the DAO, a decentralized autonomous organization built on the Ethereum blockchain, was hacked, resulting in the theft of nearly $50 million in virtual currency. Finally, the lack of widespread adoption and regulation of cryptocurrencies can also be a risk for investors. While cryptocurrencies have gained popularity among a subset of investors, they are not yet widely accepted as a legitimate form of currency. This can lead to difficulties in using cryptocurrencies for everyday transactions, as well as issues with liquidity when trying to convert cryptocurrencies back into fiat currency.
While cryptocurrencies can offer investors the potential for significant returns, they are not without their dangers and risks. The volatility of cryptocurrencies, susceptibility to fraud and scams, anonymity, reliance on technology, and lack of widespread adoption and regulation all contribute to their inherent risks. As with any investment, it is essential to thoroughly research and understand the risks before investing in cryptocurrencies.
Scams Involving Crypto and Virtual Currency Are Growing More Common
Over the past few years, cryptocurrencies and virtual currencies have gained popularity as a way to invest and conduct transactions online. However, with the rise in popularity, there has also been an increase in the number of scams and fraudulent activities related to cryptocurrencies. One common scam involving cryptocurrencies is the Ponzi scheme. In a Ponzi scheme, the scammer promises high returns on investment but pays off earlier investors with the money from new investors. The scheme continues until there are no more new investors, and the scammer disappears with the money. Ponzi schemes have been around for decades, but the anonymity and lack of regulation in the cryptocurrency world make them more appealing to scammers. Another scam involving cryptocurrencies is the fake initial coin offering (ICO). ICOs are a way for companies to raise funds by creating and selling their own cryptocurrency. Scammers take advantage of this by creating fake ICOs, often using fake websites and social media accounts, to trick investors into sending them money in exchange for worthless or non-existent coins.
Phishing scams are also prevalent in the cryptocurrency world. Scammers will send emails or messages posing as a legitimate cryptocurrency exchange or wallet provider and trick users into giving them access to their accounts. Once the scammer has access, they can steal the user’s cryptocurrencies. Cryptojacking is another type of scam involving cryptocurrencies. In this type of scam, the scammer infects a user’s computer or mobile device with malware that uses the device’s processing power to mine cryptocurrencies. The user is unaware of the infection and is left with a slow and unusable device. Finally, there is the classic “send me Bitcoin, and I’ll send you more back” scam, otherwise known as Bitcoin Giveaway Fraud. Scammers will promise to send back more Bitcoin than they receive from the victim, but in reality, they keep the Bitcoin and disappear.
To protect yourself from cryptocurrency scams, it’s essential to be cautious and do your research before investing in any cryptocurrency. You should only use reputable exchanges and wallet providers and avoid clicking on suspicious links or downloading software from unknown sources. It’s also crucial to understand that investing in cryptocurrencies is inherently risky and to only invest what you can afford to lose.