In less than two years, the Federal Trade Commission (FTC) of the United States reports that over 46,000 people have lost over $1 billion to crypto scams.
According to a report published by the FTC on June 3, 2022, the number of cryptocurrency scams has increased sixtyfold since 2018. Since the perpetrator’s identity is unknown and the transaction cannot be reversed, they assert that the anonymity of blockchain transactions is the primary cause of crypto scams.
Scammers are attracted to crypto for a number of reasons. There is no bank or other centralised authority that attempts to identify suspicious transactions and prevent fraud before it occurs. Once the money has been spent, it can not be recovered.
The top cryptocurrencies used by fraudsters were bitcoin (70%), Tether USD (10%), and ether (9%).
FTC also noted that crypto scammers primarily use social media to find victims. Nearly half of those who have fallen victim to crypto since 2021 reported that it began with an advertisement, post, or message on a social media platform. Instagram (32%), Facebook (26%), WhatsApp (9%), and Telegram (7%) were the most popular platforms.
It was also said that most social media scams come in the form of business opportunities because people are more likely to believe false promises.
FTC added:
In fact, since 2021, bogus investment opportunities accounted for $575 million of all crypto fraud losses reported to the FTC, far more than any other type of crypto fraud. From what people say about these scams, they sound like the perfect storm: false promises of easy money and a lack of crypto knowledge and experience.
Since 2021, romance scams have generated $185 million in cryptocurrency.
