The IRS is warning cryptocurrency owners of a scam directed at them.

How does the scam work?

The taxpayer, a cryptocurrency owner, receives a letter which looks as if it is coming from the IRS. The letter advises the taxpayer that he/she must enroll in a “Digital Asset Compliance Portal” by a certain deadline. The letter instructs the taxpayer to scan a QR code which will take them to a fraudulent website which looks similar to the official

IRS website. Once on the website, the taxpayer will be asked for personal information, cryptocurrency wallet information, exchange account credentials, and other sensitive data that can be used to steal the taxpayer’s identity or digital assets.

The infrastructure behind this scheme was traced by Coinbase and Dark Towers to a domain registered in Hong Kong and hosted in Romania. More information regarding the scheme can be found at https://www.coinbase.com/blog/consumer-protection-tuesday-fake-irs-scam

What to do if you receive such a letter?

Ignore the letter. It did not come from the IRS. The IRS does not require registration of cryptocurrency holdings nor does it have a registration portal for digital assets.

Report the scheme to the IRS at https://www.irs.gov/help/report-fraud

How to protect yourself from schemes.

• Do not scan QR codes from unsolicited letters, emails or texts, especially if the communication is coming from the government or one of its agencies.
• Remember that the IRS will not call you, text you or email you asking for payment or for personal financial information.
• Do not act in haste. Scammers will inject a sense of urgency into their communications. Stop and verify directly with the IRS before taking action.
• Protect your personal and financial information. Do not share passwords, wallet recovery phrases or passkeys especially in response to unsolicited communications.
• Monitor your financial accounts regularly and establish multi factor authentication. Immediately report any suspicious activity to your financial institution.
• Before sending money or making major financial decisions discuss the situation with a trusted family member, financial advisor or attorney.
• Be cautious of new online acquaintances. Verify identities before engaging further.

What should you do if you shared information?

If you shared personal information and then discover that you were the subject of a fraudulent scheme take the following steps:

• Stop communicating with the scammer immediately.
• Immediately change the password on all affected accounts.
• Contact your financial institution or cryptocurrency exchange immediately if you shared your credentials.
• Preserve emails, texts, letters or any other communications regarding the scheme.
• Report the fraud to the IRS or other applicable government agencies.