US FTC: Crypto scams have cost 46,000 people over $1 billion since the beginning of 2021

The Federal Trade Commission (FTC) recently released a report on crypto scams. The full text is as follows:

From Super Bowl commercials to Bitcoin ATMs, cryptocurrencies seem to be everywhere these days. While it has yet to become a mainstream payment method, it is worrying that it has become a common method for scammers to get people out of money, according to the FTC report. Since the beginning of 2021, more than 46,000 people have reported total losses of more than $1 billion to cryptocurrency scams, which is roughly a quarter of all reported losses and more than any other payment method. Individuals reported median losses as high as $2,600. The cryptocurrencies most commonly paid to scammers include BTC (70%), USDT (10%), and ETH (9%), the reporter said.

U.S. FTC: Since the beginning of 2021, crypto scams have cost 46,000 people more than $1 billion

Cryptocurrencies have several characteristics that are attractive to scammers, which may help explain why losses reported in 2021 are nearly 60 times higher than in 2018. In the case of cryptocurrencies, there are no banks or other centralized institutions to flag suspicious transactions and try to stop fraud before it happens. Additionally, cryptocurrency transfers cannot be reversed, and once the money has gone, it cannot be recovered. In fact, most people are still unfamiliar with how cryptocurrencies work. These considerations are not unique to crypto exchanges, but they all benefit scammers.

The report points out that social media and cryptocurrencies are a combination prone to fraud. Nearly half of those who reported losing cryptocurrency to scams since 2021 said it all started with an ad, post or message on a social media platform.

Nearly four in 10 losses from social media-initiated scams during this period were in cryptocurrencies, far more than any other payment method . The top platforms covered in these reports are Instagram (32%), Facebook (26%), WhatsApp (9%) and Telegram (7%).

Of the cryptocurrency fraud loss reports that started on social media, the majority were investment scams. In fact, $575 million of all cryptocurrency fraud losses received by the FTC since 2021 were related to fake investment opportunities, far more than any other type of scam. The stories people share about these scams have a common formula: scammers make false promises of high returns on investment when people have limited understanding and experience with cryptocurrencies. Investment scammers claim that they can make huge returns for investors quickly and easily. But these crypto “investments” went directly into the scammers’ wallets. People report that investing websites and apps let them track the growth of the cryptocurrencies they invest in, but these are fake. Some people reported that they had also tested a small number of withdrawals – enough to convince them that everything was safe to choose “all in”. But when they did want to cash out, they were told to pay more in cryptocurrency (fake) and they couldn’t get a penny back.

Romance scams are nowhere near as expensive as investment scams, coming in second. This type of scam has cost people $185 million in cryptocurrency since 2021, accounting for nearly one-third of the losses to investment scams during this period. And many romance scams also involve investments. According to the report, these scammers are using their supposed wealth and sophistication to confuse people. It won’t be long before they unwittingly offer tips on how to get started with cryptocurrency investing and help people invest. Those who accepted the offer reported that what they actually got was a tutorial on sending cryptocurrency to scammers. The report shows that the median personal loss in romance scams is a staggering $10,000.

U.S. FTC: Since the beginning of 2021, crypto scams have cost 46,000 people more than $1 billion

This was followed by corporate and government impersonation scams, with reported cryptocurrency losses of $133 million since 2021. The scams sometimes start with a text message purporting to be an unauthorized purchase of an Amazon item, or sometimes with an online pop-up that appears to be from a Microsoft security warning. From there, people were reportedly told the scam was widespread and their funds were at risk. Scammers may even get “banks” (but not actually banks) to come forward to support their claims. Separately, scammers posing as Border Patrol agents are telling people their accounts will be frozen as part of a drug-smuggling investigation. And the only way to protect account assets is to convert them into cryptocurrency. People reported that these “agents” instructed them to withdraw cash and put it into encrypted ATMs. The “agent” then sends a QR code and points it at the ATM camera. But this QR code is embedded with the scammer’s wallet address. Once the machine scans, their cash is gone.

Additionally, 20- to 49-year-olds are more than three times as likely to report losing their cryptocurrency than older groups. The report states that people in their 30s are the hardest hit — 35% of their reported fraud losses since 2021 are in cryptocurrencies. However, median personal losses tended to increase with age, peaking at $11,708 for those in their 70s.

Here are some things to know to avoid crypto scams:

Only scammers can guarantee profits or high returns. No cryptocurrency investment is guaranteed to make money, let alone get rich.

No legal body will ask you to buy cryptocurrencies. Not to solve problems, not to protect your money. This is a scam.

Never confuse online dating with investment advice. If your new lover wants to show you how to invest in cryptocurrencies, or ask you to send them cryptocurrencies, this is often a scam.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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