Crypto balances skyrocketed, but cashing out was impossible. It's the new scam the FBI is warning people about.

Authorities are warning consumers about a surge in cryptocurrency scams, particularly as digital currencies reach record highs. Victims are lured by promises of large returns, often investing significant savings or assets, only to discover they cannot withdraw their funds and are asked to pay large 'taxes' to access their money.

The FBI has responded by launching 'Operation Level Up,' a proactive initiative to identify and warn potential victims before they realize they are being scammed. The agency reports that average losses are around $140,000 per victim, and that scammers frequently use social media, dating sites, and even follow up with fake recovery schemes. The FBI urges investors to research thoroughly and consult trusted sources before investing, noting that artificial intelligence is making scams more sophisticated.

Beware of crypto scams this holiday season

We're ringing in the final day of our 12 scams of Christmas. Today we take a look at scammers promising massive returns as cryptocurrency hits record highs this year. Victims watching their balances skyrocket but when it's time to cash out that's as they say when the fight started. Mallory Sifoste from our Scripps News Group in Baltimore joins us live and Mallory walk us through how this scam usually plays out. Hi Del yeah individuals targeted in these schemes go all in. They invest their savings, retirement accounts, some are even convinced to liquidate assets or take out home equity loans. The losses have become so devastating the FBI is trying something new identifying and warning victims before they even realize they're being scammed. These two investors started small. Started out with about $2,000. I decided why not 500 bucks if it doesn't work and lo and behold I made money. Almost instantly their investments multiplied. It seems so easy to make that much money you know in that short period of time and my greed just went into full bloom. So Karen put in everything she had. I pretty much invested a lot. Um I would say like maybe over $3 million but when they tried to access their money they hit a wall. You have to pay um some sort of tax in order to pull out but in order to do that you have to pay like 20 30% of what you made. Both lost everything. How much money did they take? 50 grand. It's a lot of money. It's a lot of money. Once you fall into that initial trap, it's kind of hard to get out so hard. Karen didn't believe the FBI when agents reached out to warn her. I got an email from the FBI saying you know we're seeing a lot of um activity with your account and we think you might be being scammed. And when I first saw the email, I thought it was a scam operation level up. So this is an initiative that the FBI started in January of 2024 where we proactively identify victims who are in the midst of being scammed. FBI Supervisory Special Agent Keith Custer said they're trying to prevent losses considering how significant they can be. So the average loss is about $140,000 and it often starts with a simple message either in accidental text or through social media or sometimes through a dating site and they'll take whatever amount of time is required to develop a level of trust sometimes for months. Once the money is gone, scammers try again. They will then contact the victim with what we would call a recovery scheme and purport to be a law firm or another firm that can assist them in unlocking these millions of dollars that don't really exist. It's hard psychologically for a victim to come to grips with. I've just lost everything and hold on to that little hope that maybe one more transaction can unlock everything and get them back. The FBI says they've seen success with Operation Level Up in less than two years. They've saved victims over $400 million in losses and they urge anyone considering an investment to slow down, talk it over with someone you trust, research the company, look for complaints and check that they're licensed or registered. Del. Mallory, this is just incredible. What else did the FBI have to say about these scams and how might they evolve I guess in the future? Yeah, so Agent Custer told me that artificial intelligence is increasing these scammers capabilities and soon the entire process could be done with a chat bot. So you really want to do your due diligence and you can find more information on investing and avoiding fraud by visiting investor dot gov. It's a U. S. Securities and Exchange Commission website with the latest guidance. Del. Mallory Sifoste from our Scription News Group in Baltimore. Need I say Merry Christmas? Mallory, thank you very much.

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