Have you ever encountered an online advertisement offering an irresistible investment opportunity in crypto-assets that promises to increase your savings overnight? Be cautious, as it is likely a fraud aiming to coax you into investing money for promised high returns that never materialize, warns the Banco de Portugal (BdP).
Fraudsters often masquerade as representatives of entities that allegedly manage investments in crypto-assets or offer assistance in recovering supposedly held crypto-assets, adds the BdP. They advise: “Do not fall into the trap.”
What are crypto-assets?
Crypto-assets, or virtual assets (such as Bitcoin, Ethereum, PAX Gold), are described by the BdP as “digital representations of values or rights that can be transferred and stored electronically.”
“Despite their potential use for making payments, they are not legal tender in Portugal, and thus nobody is obligated to accept virtual assets as payment. Virtual assets are not guaranteed by the Banco de Portugal nor any other national or European authority,” it continues.
It’s important to note that “most virtual assets are subject to considerable volatility” and “in the case of partial or total devaluation of these assets, there is no fund to cover potential losses, meaning users bear the entire risk associated with these instruments.”
“As such, holders of virtual assets might lose a significant portion or all of their invested capital,” explains the BdP.
Tips for protection (according to the Banco de Portugal)
- Do not make financial decisions based solely on online recommendations
“Adopt a critical attitude towards online information, which can be misleading and use manipulated information and testimonials. Do not respond to unsolicited messages; block or report the phone number/profile. Do not share personal data with online contacts.”
- If an opportunity seems too good to be true, be suspicious
Exercise caution with unmissable offers promising significant and immediate gains, as these often correspond to fraudulent situations. Crypto-assets are frequently used in scams due to their complexity and the general lack of understanding by many people. Educate yourself about the products you are considering and clarify all your doubts.
- Ensure you contract products and financial services from genuine, reliable, and well-established entities in the market
Be skeptical if you cannot find an address, phone contacts, or legal information about the entity. Consider that many entities dealing in virtual assets are not based in Portugal, potentially placing conflict resolution outside the jurisdiction of national authorities. No supervisor verifies whether these entities are sound and capable of fulfilling their commitments in the medium and long term. Nor is there any supervisor to ensure that these entities correctly inform clients about the services provided and the risks associated with these investments.
Nonetheless, confirm if the entity appears on alerts published by the financial supervisory authorities, indicating they are not authorized to market the products and services in question, as seen on the website of the European Securities and Markets Authority.
The Banco de Portugal is the national authority responsible for supervising entities that, as of December 30, 2024, were registered and whose activities had been communicated, engaging in certain activities with virtual assets in Portugal, but solely for anti-money laundering and terrorism financing prevention purposes. The Banco de Portugal does not have the authority to monitor whether these entities are solid and provide all necessary information to clients.”
And remember:
- When in doubt, do not share personal data;
- Immediately contact your bank or another payment service provider if you notice unauthorized movements in your account;
- If you fall victim to fraud, report it to the nearest criminal police authority (PSP, GNR, or PJ) or the Public Prosecutor’s Office.
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