Crypto Scams Hit $1 Billion Milestone Since 2021. Here’s How to Protect Yourself

Image source: Getty Images

More than 46,000 people reported being a victim of a crypto scam, the median amount lost was $2,600 per person.


Key points

  • According to the recent Federal Trade Commission (FTC) report, the top cryptos people claimed they used to pay scammers were Bitcoin, Tether, and Ether.
  • The FTC report also found that certain crypto traits including its decentralized nature, low regulatory oversight, and fast transaction, explain why the reported losses in 2021 were nearly 60 times what they were in 2018.
  • Nearly half of the people who suffered a crypto scam said it initially started on a social media web site as an investment or romance.

According to a report released earlier this month by the U.S. Federal Trade Commission (FTC), since the beginning of last year, more than 46,000 people have reported losing over $1 billion in crypto scams — that’s about 1 out of every 4 dollars reported lost, more than any other payment method. The study further found that the median amount lost by a crypto scamming victim was $2,600 per person.

Additionally, the FTC stated in its report that nearly half of the people who suffered a crypto scam said it initially occurred on a social media web site. The top social platforms cited as having the most reported scams were Instagram (32%), Facebook (26%), WhatsApp (9%), and Telegram (7%). The FTC data further showed that the top cryptocurrencies people said they used to pay scammers were Bitcoin (70%), Tether (10%), and Ether (9%).

Three tips the FTC suggests to not fall victim to crypto scams

One of the more surprising aspects of the FTC report was that younger people were more likely to be a victim of a crypto scam than older demographics, which could be due to wider crypto adoption among Gen Z, millennials, and Gen X cohorts.

The FTC findings also uncovered that individuals between the ages of 20 and 49 were more than three times as likely as older age groups to have reported losing cryptocurrency to a scammer. Reports point to people in their 30s as the hardest hit — 35% of their reported fraud losses since 2021 were in cryptocurrency.

To help curb the incidence of successful crypto scammers, the FTC provides these three tips to help you avoid falling victim to a crypto con.

  1. Only scammers will guarantee profits or big returns. No cryptocurrency investment is ever guaranteed to make money, let alone big money.
  2. Nobody legit will require you to buy cryptocurrency. Not to sort out a problem, not to protect your money. That’s a scam.
  3. Never mix online dating and investment advice. If a new love interest wants to show you how to invest in crypto, or asks you to send them crypto, that’s a scam.

It’s worth noting that a Chainalysis study from earlier this year found that incidence of NFT fraud and scams were on the rise as well. If you’ve been a crypto scam victim you can report it by visiting ReportFraud.ftc.gov. And if you want to learn more about cryptocurrency scams — and how to spot and avoid scams generally — visit ftc.gov/cryptocurrency.

Our top crypto play isn’t a token – Here’s why

We’ve found one company that’s positioned itself perfectly as a long-term picks-and-shovels solution for the broader crypto market — Bitcoin, Dogecoin, and all the others. In fact, you’ve probably used this company’s technology in the past few days, even if you’ve never had an account or even heard of the company before. That’s how prevalent it’s become.

Sign up today for Stock Advisor and get access to our exclusive report where you can get the full scoop on this company and its upside as a long-term investment. Learn more and get started today with a special new member discount.

Get started

Earn a $50 bitcoin bonus

Our updated list of the best cryptocurrency apps for 2022 is packed with best-in-class picks. The cryptocurrency apps that landed on our shortlist include perks such as $0 commissions, and one pick that is offering a $50 bitcoin bonus. Check out the list here and get started on your crypto journey, today.

Get the top picks


Be the first to comment

Leave a Reply

Your email address will not be published.


*