The U.S. Secret Service is warning REALTORS® about a new cryptocurrency scam targeting real estate professionals.  It is a sophisticated scheme that begins with a potential buyer requesting the services of a REALTOR®.  The potential buyer is out of state, looking to purchase a multi-million dollar home and will pay in cash.  When asked for proof of funds, the potential buyer casually mentions they are a cryptocurrency investor, but they invite questions about their occupation and how much money can be made.  Over time, the potential buyer establishes a relationship with the REALTOR® and soft sells them on making a small investment or talking to their investment manager (who is a more skilled con artist).

Once the REALTOR® is convinced to make a small investment, their account is set up to buy and sell cryptocurrency, usually through Black Rock trading tools.  All websites and crypto “wallets” mirror real investment companies.  The initial investment always increases in value and profits are quickly seen on paper.  The REALTOR® is even encouraged to withdraw some of their gains to dispel any concerns and reinforce the legitimacy of the investment.  The apparent validity of the investment and its success motivates the REALTOR® to invest more.

Predictably, if the REALTOR® ever wants to make a large withdrawal, they encounter problems.  There may be a fee to convert the cryptocurrency to cash or taxes may need to be paid upfront on the gains.[1]  But even if these fees or taxes are paid, no money is ever received.  It is just the last opportunity for the fraudsters to extract more money from the victim.

Unfortunately, this scam is prevalent, and one REALTOR® victim lost their entire retirement savings.  In 2024 alone, cryptocurrency investment scams accounted for $5.8 Billion in losses and generated over 40,000 complaints.  The U.S. Secret Service warns all REALTORS® and the public to be alert to these “hog butchering” schemes that are designed to build trust over time, start with a small cryptocurrency investment, show profits, and entice greater investments to swindle as much money from the victim as possible.

If you or anyone you know suspects they are being victimized by a cryptocurrency scheme, please report the matter at ic3.gov or email the U.S. Secret Service at CryptoFraud@usss.dhs.gov.

[1] Please note the IRS does not require pre-payment of taxes on investment account withdrawals.