Cryptocurrency has become a new form of digital asset.
However, the Federal Trade Commission (FTC) stated that as of January 2022 to March 2022, there have been reports from 46,000 individuals who have been victims of crypto scams.
Within that time period, consumers have reported a loss of $1 billion in cryptocurrency. This new figure represents a significant increase from previously reported losses by the FTC.
Cryptocurrency Scams in the U.S.
Cryptocurrency has become the new tool for scammers to lure in thousands of dollars from consumers.
The current cryptocurrency scam report is a significant increase compared to the previous report of the FTC. The agency estimates that there is roughly an $80 million loss to cryptocurrency investment scams based on approximately 7,000 reports.
The latest report, however, aligns with the previous findings of the FBI's Internet Crime Report in 2021. The FBI stated that in 2021, the Internet Crime Complaint Center (IC3) received 34,202 reports that involved the use of a cryptocurrency of some kind, such as Bitcoin, Ethereum, Litecoin, or Ripple.
The latest record of the FBI represented a drop from the number of victims that were recorded in 2020, which was 35,229. However, the amount lost in those transactions is definitely much higher. Bleeping Computer reported that the IC3 recorded a total loss of $246,212,432 in 2020. While the total value lost in 2021 is more than $1.6 billion.
Additionally, the FTC revealed today that cryptocurrency was used to pay for one out of every four dollars that were given to crypto scammers during the course of the previous year.
The Federal Bureau of Investigation issued a warning to owners of cryptocurrencies in July 2021, alerting them to the fact that scammers are actively targeting digital assets.
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Crypto Scam Tactics
The crypto scams are conducted in a way where the scammers lure victims into their traps by promising a potential investment that is going to be huge and will earn a huge return of money if they invest.
The false promises in cryptocurrency had numerous consumers lose thousands of dollars. According to the most recent edition of Consumer Protection Data Spotlight published by the FTC, the majority of the cryptocurrency losses that consumers reported involved fraudulent opportunities to invest in cryptocurrencies.
These losses, which totaled $575 million in reported losses since January 2021, were reported by consumers.
According to the Federal Trade Commission, the biggest crypto scam tactic was cryptocurrency investment schemes. Next to it are crypto scams lured by romantic interest. These romance-influenced scams typically feature a love interest who tries to persuade the potential investor to put money into something that turns out to be a fraudulent bitcoin investment.
Last on the list are crypto scams stemming from business and government impersonation. These malicious actors sway consumers, encouraging them to invest in cryptocurrency because their money is at risk of government investigation or telling them that the only way to secure their money is through converting it through cryptocurrency.
According to several reports, cryptocurrency-related scams frequently start on social media platforms. A little less than half of the consumers who have come forward to disclose being victims of a cryptocurrency-related fraud since 2021 have stated that it began with an advertisement, post, or message on one of the social media platforms.
Victims of the scams are reported to be aged around 20 to 49. When people of older ages did report a cryptocurrency-related scam, they reported losing a greater amount of money than those of younger ages.
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