Empowering Healthy Business Podcast Episode 50 : Understanding Crypto Investments and Preventing Financial Fraud with Jason Costain

Crypto attracts headlines, big promises, and big risks. Prices can swing fast, exchanges come and go, and scams target both consumers and small businesses. In this episode of the Empowering Healthy Business podcast, Calvin speaks with Jason Costain, a 25-year banking fraud leader, about what owners need to know to keep money safe. This blog turns that conversation into a practical guide to crypto investments and financial fraud—what’s real, what’s risky, and how to protect your business and your family.

Crypto basics: value, hype, and where risk really lives

At its core, cryptocurrency is a digital token recorded on a public ledger (the blockchain). Supply for some tokens (like Bitcoin) is limited, and transactions are visible on the chain. Those ideas helped fuel adoption. But Jason’s view from frontline bank fraud teams adds essential context:

• Exchanges aren’t banks. Most crypto platforms don’t meet bank-level capital, compliance, or consumer-protection standards. If an exchange fails, gets hacked, or simply shuts down, there’s no FDIC-style safety net.
• Volatility is the rule. Prices often move on speculation and influencer hype, not on fundamentals. Calling it “investing” can mask the fact that many people are speculating on price.
• Infrastructure risk is real. High-profile collapses (e.g., FTX) showed how customer deposits could be misused in ways that would never pass at a regulated bank.

Jason’s bottom line: blockchain technology has valid uses, but most tokens will not last. Treat crypto exposure as high-risk and size it accordingly—or choose to sit it out.

Crypto investments and financial fraud: how scams actually work

Banks around the world now see crypto investments and financial fraud intersect in two major ways:

1. Platform failures or manipulation
   Some exchanges or “yield” programs present as legitimate but hide risky or improper practices behind slick brands and celebrity marketing. When they implode, customers can be left with nothing.
2. Scams that use crypto as the payment rail
   Fraudsters prefer crypto because payments are fast and irreversible. Common patterns include:

• “Guaranteed returns” investment sites. Victims see a polished dashboard with fake profits. When they try to withdraw, the site demands “taxes” or “fees,” then disappears.
• Romance or impersonation scams. Criminals befriend victims online, borrow their trust, then push them to fund crypto “opportunities.”
• Invoice and business-email compromise (BEC). Criminals spoof vendors or leaders, urge urgent payment, and route funds through crypto exchanges or mule accounts to erase the trail.
• Deepfake voice/video. AI tools now clone executives to approve bogus transfers. If urgency is high and checks are weak, money moves before anyone questions it.

Why this works: Modern fraud is less about hacking systems and more about hacking people—using urgency, fear, and authority to shortcut judgment.

How banks and regulators are responding (and what you can learn from it)

Jason explained how leading banks combine policy, analytics, and psychology:

• Outbound-payment monitoring. Banks flag unusual transfers to exchanges (by size, timing, or destination). Some payments are delayed while the bank calls the customer to verify intent.
• “Confirmation of payee.” Matching recipient name and account helps stop invoice-redirection scams before money moves.
• Real-time friction. Timely, plain-English warnings (“Are you sure your advisor asked you to do this?”) prompt a pause that can break the scammer’s spell.
• Education that sticks. Short reminders delivered often outperform once-a-year training. Awareness fades after ~30 days, so repetition matters.

Takeaway: the best defenses mix technology with human behavior. Small businesses can use the same principles.

Practical playbook: prevent fraud and make safer decisions

You don’t need a bank’s budget to protect your company and household. Use these simple controls:

1) Control payments

• Turn on dual authorization for wires and ACH. No single person should be able to send large payments.
• Require call-backs on known numbers before changing bank details or paying unusual invoices. Never trust phone numbers in an email request.
• Use payment limits and alerts so large or out-of-hours transfers require a second check.

2) Harden access

• Enforce multi-factor authentication (MFA) on email, accounting, banking, and payroll systems.
• Restrict admin rights. Close old accounts. Log out shared devices.
• Use a password manager and unique logins for every critical platform.

3) Train for the real world

• Teach a simple, memorable rule set: Pause → Verify → Report.
  • Pause: Scammers rely on urgency. Slow down.
  • Verify: Use known contacts or official websites—not links or numbers given by the requester.
  • Report: Call your bank immediately if you suspect fraud. Speed improves recovery odds.
• Run quick drills twice a quarter. Share real examples your team might see.

4) Treat crypto like a high-risk asset (or avoid it)

• If you accept crypto, expect volatility, tax complexity, and fraud risk. For most small businesses, traditional processors are safer and simpler.
• If you invest, limit exposure, use reputable custodians, and assume you could lose it all. Never move funds after a cold call, a DM, or pressure to act now.

5) Prepare for AI-powered scams

• Create a “no-wire on voice alone” policy. Voice or video approvals must be confirmed in writing via a known channel.
• Add a short hold for any urgent, unusual payment so a second leader can review.

When blockchain can make sense (without the hype)

Jason notes that private or permissioned blockchains can help with record integrity (e.g., supply chain, contracts) without public tokens or speculative trading. If you’re exploring blockchain for operations, keep it inside your existing governance, risk, and compliance framework—and avoid tying outcomes to token prices.

Conclusion: be curious, be careful, and talk about it

Fraud thrives in silence. Share near-misses with your team. Tell peers what almost fooled you. Build light friction into your payment process. And if you choose to engage with crypto, do it with clear eyes and small stakes. The best defense against crypto investments and financial fraud is a mix of simple controls, steady education, and a culture that rewards pausing before sending money.

Want to go deeper? Listen to the full conversation with Jason Costain on the Empowering Healthy Business Podcast