The Federal Trade Commission’s latest report highlights that consumers lost over $1 billion to crypto scammers over the span of January 2021 to March 2022. The FTC report reveals that scammers use cryptocurrency as their favorite payment of choice as one out of every four dollars of these crimes was paid in crypto. The reported loss accounts for over 46,000 people losing over $1 billion in total.
Bitcoin accounts for 70% of the lost crypto
Scammers seem to be more interested in looting bitcoin as it stands tall at 70%, followed by Tether (10%) and Ether (9%). The reported losses in 2021 account for over 60 times higher than what they were in 2018. Crypto has been the highlight of the scams as there is no centralized authority or institution to stop the fraudulent transactions or stop the scams from happening.
Even though crypto got mainstream attention last year, most users don’t have a basic idea of how crypto works. As the transactions are irreversible, the money once left is gone for good. Most fraud victims reported that the scams began with an advertisement, message, or social media post.
Most of the reported crypto frauds popped up on top social media platforms, including Instagram, Facebook, WhatsApp, and Telegram. The highest reported frauds amount to investment scams where investors are lured through attractive ads promising to make higher returns from their investments.
Scammy investment opportunities account for $575 million of all crypto scams. Eye-popping return promises, along with investors’ poor understanding of crypto, trick the users into pooling their money. Romance scams follow the investment scams, accounting for $185 million of the crypto frauds. It is followed by business impersonation scams that stand at $133 million.
To avoid falling for these scams, investors should do their own research. Refraining from scammers guaranteeing higher returns is the primary step. It is also in the best interest to avoid taking investment advice. When putting in your blood and sweat money, take some time to educate yourself about the project.