A recent report from the Federal Trade Commission (FTC) revealed that over 46,000 individuals have lost over $1 billion in cryptocurrency scams ever since the beginning of 2021.
According to the Federal Trade Commission, the most popular types of cryptocurrency that people have said that they have given to scammers are bitcoin, tether, or ether. On average, each individual has lost over $2,600 to these scams.
"Crypto has several features that are attractive to scammers, which may help explain why the reported losses in 2021 were nearly sixty times what they were in 2018," Emma Fletcher, senior researcher at FTC, said in a blog post.
The Federal Trade Commission has also said that social media is a huge platform on which cryptocurrency fraud has become prevalent. Over 50% of individuals who have fallen prey to cryptocurrency scams have stated that they have found them on advertisements, posts, or messages on social media posts. 32% have reported finding these scams on Instagram, 26% on Facebook
One "attractive feature to scammers" regarding the cryptocurrency is the fact that there are no banks or other institutions that can warn users of threatening or suspicious activity, or try to put a stop to the fraudulent activity before it occurs. As soon as cryptocurrency transfers and transactions happen, they cannot be undone or changed.
When it comes to the types of cryptocurrency scams that are out there, the majority of them have been reported as investment scams. Ever since the year 2021, $575 million of total scams have been reported as investment fraud. Individuals who have fallen prey to this type of scam usually describe their experiences as having people make false promises of money that do not come to fruition or reflect reality. They usually make claims that they can help individuals earn large amounts of money in quick amounts of time, but these investments go to the scammer instead of the individual.
Some major signs of cryptocurrency scams are: the immediate promise of huge profits or returns without effort; a pushy, forceful attitude when it comes to investing in cryptocurrency; and the mention of cryptocurrency during online dating. Overall, cryptocurrency scams can be avoided if the proper precautions are taken, but one has to pay close attention to the major signs of a scam.
- https://www.ftc.gov/news-events/data-visualizations/data-spotlight/2022/06/reports-show-scammers-cashing-crypto-craze
- https://www.cnbc.com/2022/06/03/crypto-scams-cost-people-more-than-1-billion-since-2021-ftc.html
- https://www.marketwatch.com/story/consumers-report-losing-1-billion-in-crypto-to-scammers-since-2021-ftc-study-says-11654269612
- https://finance.yahoo.com/news/crypto-scam-victims-lose-more-175714528.html
