By Nathalie Voit
More than 46,000 Americans have lost over $1 billion in crypto to scams since the start of 2021, according to a new report released by the Federal Trade Commission (FTC) on June 3.
Reported losses last year were nearly 60 times what they were in 2018, with a median loss of $2,600 per individual. Bitcoin (70%), Tether (10%), and Ether (9%) topped the list of cryptocurrencies people said they used to pay scammers.
Nearly one in two people who reported losing money to a crypto scam since 2021 said it started with some kind of advertisement, post, or message on social media. Respondents identified Instagram (32%), Facebook (26%), WhatsApp (9%), and Telegram (7%) as the top culprits in the complaints.
Fraudulent investment opportunities were the most common scam, responsible for a whopping $575 million in crypto fraud losses reported to the FTC since the start of 2021. Victims of bogus investment schemes reported being able to track the growth of their crypto on investment websites or apps, only to realize the websites were phony when they tried to make a withdrawal. Other people recalled sending money to investors promising to get them huge returns, only to never see their funds again.
Romance scams came in a distant second, raking in $185 million in fraudulent money. Romance scams occur when individuals looking to find a new love interest on an online dating app or social media meet a crypto con artist instead. The average individual reported loss to a romance scammer is an impressive $10,000.
Business and government impersonation scams were the third most common source of crypto fraud losses, accounting for $133 million in illicit funds. According to the FTC, these scams often start with fake messages or alarming online pop-ups that look like an authentic security alert from well-known tech companies like Amazon or Microsoft.
Younger Americans were more likely to become a victim of a crypto scam. The FTC says people aged 20 to 49 are three times as likely as older Americans to report losing crypto to a con artist.
The FTC advised consumers to steer clear of so-called “crypto investment opportunities” promising profits or big returns to avoid being duped. “No cryptocurrency investment is ever guaranteed to make money, let alone big money,” the agency said. Consumers should also avoid mixing online dating with investment advice. The FTC said that business entanglements that require a crypto purchase are also a big red flag.
You can read the full report here.
