Technology is always changing, including the way we spend money. More people are buying into cryptocurrency and thieves are busy trying to figure out how to cash in too. Our KPRC 2 Investigates team has one family’s cryptocurrency fraud story and what anyone considering crypto should know.
What is cryptocurrency?
Cryptocurrencies are digital coins that allow people to make payments to each other online. It’s also a way to invest your money. One Houston dad says he’s worried his teenage son is losing thousands of dollars with crypto.
“He’s been investing since he was a sophomore in high school,” said Elias Garcia, Senior.
“I always had like a little fame for just numbers. Like, I was always good at math. So it’s like, numbers money, kind of correlate,” said Elias Junior.
Elias Garcia Senior knows his son is good with money but his latest buy on a cryptocurrency website has him worried.
“When I saw the website, that’s what I like, ‘Oh, wait, wait, wait.. maybe it’s way too much,” he said.
The idea of the Crypto Exchange Base website is simple.
“The more you put, it multiplies,” explains Elias Senior.
The problem is Elias Junior can’t get his money out. His “broker” keeps asking him to add more money to his account before he can make a withdrawal.
“To be honest, I knew it was kind of sketch from the beginning,” said Elias Junior.
Cryptocurrency fraud is crazy high right now
The Federal Trade Commission says in the past year, consumers reported losing $80 million to cryptocurrency investment fraud. That’s ten times more than the previous year.
The F-T-C says red flags to avoid include a guarantee that you’ll make money, the promise of big payouts, or free money.
“I put in $300. I got like $700 in profit. So I had like $1,000,” he explains.
Then Elias added $2,300 more hoping for that quick promised profit. Weeks later and Elias Junior now says he is locked out of his account altogether.
Our KPRC 2 Investigates team tried for weeks and couldn’t reach anyone from the Crypto Exchange Website.
We also discovered these purported real people praising the website in “testimonies” aren’t real at all. The pictures are stock photos and we found them used all over the internet.
“You need to be cautious,” said lawyer and author, Clay Rawlings.
Cryptocurrency is more popular with younger generations
Clay Rawlings is the author of “Bitcoin for Beginners.” He says the Garcia family debate is a generational divide he sees often.
“Gen X is somewhat suspicious, millennials are very accepting of it and Gen Z is all in,” he explains.
Clay believes crypto is here to stay.
“It’s no different than when the internet showed up in 95, and people made fun of it. Nobody understood it and by 2000 everybody was getting on it,” said Clay.
Elias Senior is still worried but agrees now, while his son is young, is the best time to try something like this.
“It’s time to support him. I mean, these might be a crazy idea, but let’s support him,” said Elias Senior.
“Honestly, if I lose the money, oh, well, if I don’t lose the money, oh, well. It is what it is,” said Elias Junior.
Experimenting is fine but you should make sure the exchange you are investing with is licensed to operate in the United States.
How to buy cryptocurrency
If you are interested in getting into cryptocurrency, Clay Rawlings is the expert on how to get started. Of course, he spells out every detail in his book, “Bitcoin for Beginners,” but did share a few tips with us, including where to look to get started.
First, you need to find a cryptocurrency trading platform where you can buy and trade.
Coinbase – most popular and very user-friendly site, just $5 needed to open an account
Gemini – this trading website is known for its safety. Trading fees are a bit higher than others
Robinhood – a mobile app with commission-free stock trading
eToro and CoinMama are two other popular selling sites right now.
Marketplace Fairness has other exchange suggestions. Clay says as, with all things new, there is a definite learning curve to master to gain confidence in this realm.
Related: As Bitcoin goes mainstream Wall Street looks to cash-in
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