Crypto Scam Victims Lost $1 Billion Since 2021, Social Media And Crypto 'Combustible Combination': US FTC Report
As per a recent FTC report, crypto scams in 2021 were nearly 60 times what they were in 2018.
Crypto scams are increasingly becoming a matter of grave concern for investors and regulators alike. As per a recent report by the US Federal Trade Commission (FTC), over 46,000 crypto scam victims have reported a loss of over $1 billion since the beginning of 2021. As per the latest FTC Consumer Protection Data Spotlight report, published late last week on June 3, that accounts for one out of every four US dollars reportedly lost to fraud during the said period, which is said to be “more than any other payment method.”
As per the FTC report, the scams reported since 2021 are nearly 60 times to that reported in 2018. And the report pointed out some reasons for that. “There’s no bank or other centralized authority to flag suspicious transactions and attempt to stop fraud before it happens. Crypto transfers can’t be reversed – once the money’s gone, there’s no getting it back. And most people are still unfamiliar with how crypto works. These considerations are not unique to crypto transactions, but they all play into the hands of scammers.”
Social media and crypto a "combustible combination"
Calling the combination of social media and crypto a “combustible combination for fraud,” the FTC report noted, “Nearly half the people who reported losing crypto to a scam since 2021 said it started with an ad, post, or message on a social media platform.”
The report identified that Instagram was leading among other social media platforms when it comes to crypto scams. FTC noted, “The top platforms identified in these reports were Instagram (32 percent), Facebook (26 percent), WhatsApp (9 percent), and Telegram (7 percent).”
Top fraud types by reported crypto losses
The FTC report identified four main types of scam: investment-related fraud, romance scams, business imposters, and government imposters. Out of these, the investment-related cases saw the most losses, with a reported amount of $575 million. Romance scams came in second with reported losses of $185 million. Business imposters rank third, with losses of $93 million. And lastly, government imposters-related scams saw total reported losses of $40 million.
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“People aged 20 to 49 were more than three times as likely as older age groups to have reported losing cryptocurrency to a scammer,” the FTC report said. It pointed out that people in their thirties were the hardest hit, with 35 percent of their “reported fraud losses since 2021 were in cryptocurrency.”
Crypto scam: How to avoid
The US FTC report suggested three pointers to keep in mind to steer clear of crypto scams. Firstly, it says that “only scammers will guarantee profits or big returns.” It is a known fact that not a single crypto investment can make any promise of making big money. Secondly, the FTC report said that “nobody legit will require you to buy cryptocurrency.” And lastly, “never mix online dating and investment advice.”
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