According to the latest FTC Consumer Protection Data Spotlight, from January 2021 to March 2022, consumers lost more than $1 billion to crypto frauds. About one out of every four dollars in these scams is paid in cryptocurrency. Cryptocurrency has become a potential payment option for many criminals.
The majority of crypto losses reported around $575 million were mainly due to fake investment opportunities. These scams are often advertised as bringing massive income by investing in the platforms. As a result, those who invested merely lost all their funds.
In addition to fraud, there were several other cases that consumers had fallen prey to. One of those is romance scams, in which a prospective love interest would entice someone to invest in what turned out to be a cryptocurrency scam.
Reports also demonstrated that scammers also impersonate a business or government to lure “naive preys.” In this case, these people will claim that the victim’s money was at risk of fraud or investigation unless converted into cryptocurrency.
Scams usually come from advertise
Nearly half of all crypto scams since 2021 started with an ad, post, or message on social media platforms.
The FTC report highlights several signs for consumers to be wary of, including claims of guaranteed profits or outsized returns on crypt investments, potential love interests asking for crypto payments, or any entity requiring payment in cryptocurrency.
Last year, the UK’s national reporting center for fraud and cybercrime received 7,118 crypto-fraud reports. According to the City of London Police, at the end of September, crypto frauds had stolen £146 million ($200 million), about 30% more than in 2020.
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