Despite recent price drops, cryptocurrencies continue to attract investors. Likewise, they also attract scammers, who see this market as a chance to criminally obtain digital assets. According to a recent report published by the Federal Trade Commission (FTC), more than 46,000 people reported losing more than $1 billion worth of crypto to scams since the start of 2021. According to the FTC, this is about one in four. dollars lost, more than any other payment method. In addition, the losses recorded in 2021 were almost 60 times greater than in 2018.
Losses over the years. Source: FTC
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Bitcoin is the preferred digital asset
According to the FTC, the median individual reported losses of $2,600. The top digital currencies targeted by scammers are Bitcoin (70%), Tether (10%) and Ether (9%). As the FTC points out, digital assets have several features that are attractive to scammers. As an example, the report cites that there is no bank or other centralized authority to point out suspicious transactions and try to prevent fraud.
“Crypto asset transfers cannot be reversed. And once the money is gone, there’s no getting it back. And most people are still not familiar with how cryptocurrencies work,” the report highlights.
Scams on social networks
The main means for applying scams, according to the FTC, are social networks. That’s because nearly half of people who have lost cryptocurrencies in a scam since 2021 said it all started with an ad, post or message on social media. From the beginning of last year until now, nearly four out of ten dollars lost to social media fraud have been in cryptocurrencies. That’s far more than any other payment method, according to the study. The main platforms identified were Instagram (32%), Facebook (26%), WhatsApp (9%) and Telegram (7%).
Most common types of scams
Also according to the article, most losses involving crypto and social media are investment scams. As of 2021, $575 million of all cryptocurrency fraud losses reported to the FTC have been on false investment opportunities.
“Investment scammers claim they can get huge returns quickly and easily for investors. But these crypto ‘investments’ go straight into a scammer’s wallet,” the report reads.
Also, there are investment websites and apps that claim to allow you to track the growth of your cryptocurrencies, but this is false. The second most common type of scam is related to “romance”. That’s $185 million in cryptocurrency losses reported since 2021. Third are corporate and government spoofing scams, with $133 million in digital asset losses since 2021. These scams can involve an allegedly unauthorized purchase. or an alarming online popup designed to look like a security alert.
Most affected ages
Finally, the report highlights that people aged between 20 and 49 were more than three times more likely to be scammed than older people. Reports point to people in their 30s as the hardest hit. But average individual reported losses tend to increase with age, reaching $11,708 for people in their 70s. Also read: After troubles, Ice Cube relaunches NFTs from its basketball league Read also: Dogecoin founder classifies Binance Smart Chain tokens as “junk”
