Indiana Attorney General Todd Rokita warned residents to proceed with caution when using cyptocurrency in any transaction involving the sale or lease of real estate.
“Cryptocurrency has become increasingly popular due to its ease of use and other factors,” Rokita said. “But scammers have jumped on this bandwagon as well, and we want to help Hoosiers avoid becoming unwitting victims.”
Rokita’s Homeowner Protection Unit has recently dealt with two specific scams involving cryptocurrency and real estate. In one scam, a fraudster copies a description of a local property that was recently listed for rent on a legitimate website to create a false real estate listing. The fraudster then engages with consumers and requests a security deposit and/or first month’s rent to be paid to them in Bitcoin using a Bitcoin ATM. Once the money has been exchanged, the scammer either avoids contact with the consumer or seeks additional funds from them. In another scam, the fraudster targets would-be real estate investors while posing as a legitimate Indiana-based business. The fraudster may even provide false identity documents to depict a readiness to provide capital for real estate investments. The scammer often requests significant sums of money in Bitcoin or a similar cryptocurrency to close transactions. If successful in bilking victims of initial payments, the fraudster will often seek additional sums from the victim by claiming that more money is needed to close.
Some consumers have lost thousands of dollars in these scams. Complicating efforts to catch perpetrators of these scams is the fact that it is easy to transfer cryptocurrency to a crypto wallet that is not easily linked with an individual identity.
Rokita advised Hoosiers to follow these tips before engaging in any cryptocurrency payments in exchange for products or services:
- Exercise caution. If it sounds too good to be true it probably is.
- Be wary of social media advertisements for real estate listings.
- Only send cryptocurrency to trusted third parties. Search for publicly verifiable reviews or articles involving the recipient.
- Watch for grammatical errors and spelling mistakes in communications or on websites. Many scammers operate scams from overseas while pretending to be based in the United States.