Chapter 11. Scams, frauds and red flags
Every number in the book has a source. To keep the book short, the notes live here instead of in print. Each source is listed with the section of the book it supports and the words it backs up, in the order they appear in the chapter. Web addresses are links; a page may have moved since the date shown.
The chapter page · Chapter 10 sources · All chapters · Chapter 12 sources
Who gets targeted, and why: “found more reported losses tied to cryptocurrency than to any other way of paying”
FBI Internet Crime Complaint Center, 2024 Internet Crime Report, April 2025, ic3.gov, retrieved September 2026 (cryptocurrency-related losses of $9.3 billion; losses by complainants over 60 of $4.9 billion, of which $2.8 billion was cryptocurrency-related).
Who gets targeted, and why: “older adults lost more per person to fraud than any other age group” · A fair objection: “fraud losses are led by bank transfers, crypto, wire transfers, and gift cards”
Federal Trade Commission, Consumer Sentinel Network Data Book 2024, March 2025, ftc.gov, retrieved September 2026 (2024 losses by payment method: bank transfer or payment $2.09 billion, cryptocurrency $1.42 billion, wire transfer $391 million, gift or reload card $287 million); Federal Trade Commission, “Who Experiences Scams? A Story for All Ages,” data spotlight, December 2022; Federal Trade Commission, annual report to Congress on protecting older consumers, December 2025, ftc.gov, retrieved September 2026.
Who gets targeted, and why: “the names, addresses, and phone numbers of about 272,000 customers were published online”
Ledger, “Addressing the July 2020 E-commerce and Marketing Data Breach,” ledger.com, July 2020; Ledger, “Message by Ledger’s CEO: Update on the July Data Breach,” ledger.com, December 21, 2020, retrieved September 2026 (approximately 272,000 customers’ names, postal addresses and phone numbers published December 20, 2020); CoinDesk, “Scammers Are Sending Ledger Users Fake Hardware Wallets,” June 17, 2021.
Nine ways fraud comes at you: “much of it is run from large compounds in Southeast Asia”
United Nations Office of the High Commissioner for Human Rights, Online Scam Operations and Trafficking into Forced Criminality in Southeast Asia, 2023; FBI IC3 public service announcement on cryptocurrency investment fraud, 2023.
Nine ways fraud comes at you: “A “wrong number,” a new friend, weeks of ordinary conversation, then a tip”
Federal Trade Commission, “Romance Scammers’ Favorite Lies Exposed,” data spotlight, February 9, 2023 ($1.3 billion reported lost in 2022); Federal Trade Commission, “Love Stinks When a Scammer Is Involved,” business blog, February 13, 2024 ($1.14 billion reported lost in 2023), ftc.gov, retrieved September 2026.
Nine ways fraud comes at you: “say in their own help pages that they will not phone you”
Coinbase Help Center, “Technical Support and Impersonation Scams,” help.coinbase.com, retrieved September 2026; Kraken Support, “Protect Yourself from Scams,” support.kraken.com, retrieved September 2026; Kraken, “How to Verify a Call Is Really from Kraken Support,” blog.kraken.com, retrieved September 2026.
Nine ways fraud comes at you: “The FBI counted more than $68 million lost to SIM swaps in 2021 alone”
FBI Internet Crime Complaint Center, “Criminals Increasing SIM Swap Schemes to Steal Millions of Dollars from US Public,” public service announcement I-020822-PSA, February 8, 2022, ic3.gov, retrieved September 2026 (1,611 complaints and adjusted losses of more than $68 million in 2021).
Nine ways fraud comes at you: “people who were scammed once are targeted again for this reason”
Federal Trade Commission, “Refund and Recovery Scams,” consumer.ftc.gov, December 2023, updated August 2026, retrieved September 2026.
Nine ways fraud comes at you: “deepfake videos of well-known business figures ran on video platforms for hours”
Atlantic Council Digital Forensic Research Lab, “Crypto-Scam Hosts Pop-Up Livestream Featuring a Deepfaked Elon Musk,” dfrlab.org, September 25, 2024, retrieved September 2026 (June 18, 2024 YouTube livestream that ran more than seven hours); Michael Saylor, statement on X, January 13, 2024, as reported in Decrypt, “Michael Saylor Sounds Alarm on Deepfake Bitcoin Scams,” January 2024, retrieved September 2026.
Nine ways fraud comes at you: “the FTC has warned about “family emergency” calls in a cloned voice”
Federal Trade Commission, “Scammers use AI to enhance their family emergency schemes,” consumer alert, March 2023.
Nine ways fraud comes at you: “collected an estimated $2.4 billion before it collapsed in January 2018”
U.S. Department of Justice, “BitConnect Founder Indicted in Global $2.4 Billion Cryptocurrency Scheme,” press release, February 25, 2022, justice.gov, retrieved September 2026; SEC v. BitConnect et al., complaint filed 2021.
Nine ways fraud comes at you: “a reality television star agreed to pay the SEC $1.26 million”
Securities and Exchange Commission, “SEC Charges Kim Kardashian for Unlawfully Touting Crypto Security,” press release 2022-183, October 3, 2022, sec.gov, retrieved September 2026 ($1.26 million total, of which a $1 million penalty and about $260,000 in disgorgement and interest; $250,000 promotional payment).
What to watch out for in every one: “Most of the money lost through them belongs to people over 60”
Federal Bureau of Investigation, Internet Crime Complaint Center, 2025 Internet Crime Report (April 2026), ic3.gov; AARP, “Crypto ATM fraud protections,” aarp.org, retrieved October 2026.
Bitcoin, and the companies around Bitcoin: “a software bug in August 2010 that let someone create billions of bitcoin”
Satoshi Nakamoto, “Strange block 74638,” bitcointalk.org, August 15, 2010; Bitcoin commit d4c6b90, “fix for block 74638 overflow output transaction,” github.com/bitcoin/bitcoin, August 15, 2010, released as Bitcoin 0.3.10, retrieved September 2026.
Bitcoin, and the companies around Bitcoin: “usually credited to the educator Andreas Antonopoulos: not your keys, not your coins”
Andreas M. Antonopoulos, “Your keys, your Bitcoin. Not your keys, not your Bitcoin,” quoted in Cointelegraph, August 10, 2016, after the Bitfinex hack, retrieved September 2026; Antonopoulos popularized the line, and no earlier documented origin was found.
Bitcoin, and the companies around Bitcoin: “Some exchanges now publish proof of reserves, a public demonstration, tied to the ledger”
Kraken, “Proof of Reserves,” kraken.com, retrieved September 2026; Public Company Accounting Oversight Board, “Investor Advisory: Exercise Caution with Third-Party Verification/Proof of Reserve Reports,” March 8, 2023, pcaobus.org, retrieved September 2026.
Worth repeating: “giveaway scam ever run, and it collected more than $100,000 in bitcoin”, “investigators followed the coins, and a 17-year-old in Florida was charged”
U.S. Department of Justice, “Three Individuals Charged for Alleged Roles in Twitter Hack,” press release, July 31, 2020, justice.gov, retrieved September 2026 (more than 400 transfers worth more than $100,000); Hillsborough County State Attorney’s Office, Florida, charges against Graham Ivan Clark, 17, announced July 31, 2020, as reported by CBS News, July 31, 2020.
What AI changes, and what it does not: “Artificial intelligence lets a thief clone a voice from a few seconds of recording”
Federal Trade Commission, “Scammers use AI to enhance their family emergency schemes,” consumer alert, March 2023; FBI Internet Crime Complaint Center, public service announcement on criminal use of generative AI, December 3, 2024, ic3.gov, retrieved September 2026.
Why a script beats a warning: “decide in advance exactly what they will do when the moment comes”
Peter M. Gollwitzer, “Implementation Intentions: Strong Effects of Simple Plans,” American Psychologist 54, no. 7 (1999): 493-503; Robert B. Cialdini, Raymond R. Reno and Carl A. Kallgren, “A Focus Theory of Normative Conduct: Recycling the Concept of Norms to Reduce Littering in Public Places,” Journal of Personality and Social Psychology 58, no. 6 (1990): 1015-1026; Richard H. Thaler and Cass R. Sunstein, Nudge (Yale University Press, 2008).
If it happens to you, or to someone you love: “the state’s Adult Protective Services office and the AARP Fraud Watch Network helpline”
AARP Fraud Watch Network Helpline, 877-908-3360, aarp.org, retrieved September 2026; Eldercare Locator for state Adult Protective Services offices.
If it happens to you, or to someone you love: “the IRS issued further guidance on scam losses in 2025”
Tax Cuts and Jobs Act of 2017, personal casualty and theft loss limits for 2018 through 2025; IRS Office of Chief Counsel, memorandum 202511015, “Allowance of Theft Losses for Victims of Scams Under I.R.C. Section 165,” dated January 17, 2025, released March 14, 2025, irs.gov, retrieved September 2026. The memorandum concluded that a victim who sent money to a scam platform intending to earn a profit may claim a theft loss under section 165(c)(2), which the 2018 suspension does not reach, while a victim of a romance or impersonation scam with no profit motive may not. The 2025 budget law made the suspension of personal casualty losses permanent (One Big Beautiful Bill Act, Public Law 119-21, July 4, 2025; IRS, “Casualty loss deduction expanded and made permanent,” irs.gov, updated September 15, 2026; from 2026, losses in state-declared disasters also qualify).
If it happens to you, or to someone you love
U.S. Department of Justice, “Two Arrested for Alleged Conspiracy to Launder $4.5 Billion in Stolen Cryptocurrency,” press release, February 8, 2022, justice.gov, retrieved September 2026 (over 94,000 of the 119,754 bitcoin stolen from Bitfinex in 2016).
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