According to the Federal Trade Commission (FTC), scams involving the transfer of cryptocurrency have cost consumers over $1 billion since 2021. An FTC report details how cryptocurrency had a higher scam rate than any other currency, with one dollar lost for every four earned.
Using this data, the FTC concluded that the median individual reported loss was around $2,600.
In 2018, the FTC’s Consumer Sentinel Network received fraud complaints totaling roughly $12 million. Yet, in 2021 alone, the FTC dealt with $680 million worth of fraud — almost 60 times more. Of those reports, about 70% involved the largest and most popular cryptocurrency: Bitcoin.
People aged 20 to 49 lost the most in cryptocurrency scams in the last year, with people in their 30s reporting 35% of all fraud. More than half of all reported scams began through social media, such as Facebook or Instagram.
By far, the most prominent scam was the “investment scam.” This trick involves fake promises of massive returns, sketchy sweepstakes, and even veteran pensions.
Following investment scams in frequency were what the FTC dubs “romance scams,” where a charismatic, convincing scammer offers a person tips to get into the crypto game. The scammer will often flaunt promises of wealth and appearance, but in reality, the “tips” will only lead the individual to send crypto to a scammer.
“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,” the FTC said.
Security firm Kaspersky recommends that investors take extreme caution with their cryptocurrency. They say promised returns are a large red flag because such guarantees do not exist in legitimate trading. Along with promised returns, people should be wary of anything offered for free and excessive marketing for any service.
