Crypto has respective features that are attractive to scammers, which may help to explain why the reported losses in 2021 were about sixty times what they were in 2018. There ’ s no depository financial institution or early centralize authority to flag fishy transactions and attempt to stop fraud before it happens. Crypto transfers can ’ metric ton be reversed – once the money ’ s gone, there ’ s no getting it spinal column. And most people are still unfamiliar with how crypto works. These considerations are not unique to crypto transactions, but they all play into the hands of scammers .
Reports decimal point to social media and crypto as a combustible combination for fraud. closely half the people who reported losing crypto to a victimize since 2021 said it started with an ad, post, or message on a social media platform. [ 4 ]
During this period, closely four out of every ten dollars reported lost to a imposter originating on social media was lost in crypto, far more than any other requital method. [ 5 ] The top platforms identified in these reports were Instagram ( 32 % ), Facebook ( 26 % ), WhatsApp ( 9 % ), and Telegram ( 7 % ). [ 6 ]
Of the reported crypto imposter losses that began on social media, most are investment scams. [ 7 ] indeed, since 2021, $ 575 million of all crypto fraud losses reported to the FTC were about bogus investment opportunities, far more than any other fraud type. The stories people parcel about these scams describe a perfective storm : false promises of slowly money paired with people ’ south limited crypto understand and experience. investment scammers claim they can quickly and easily get huge returns for investors. But those crypto “ investments ” go uncoiled to a swindler ’ mho wallet. People report that investment websites and apps let them track the emergence of their crypto, but it ’ s all fake. Some people report making a small “ test ” secession – merely enough to convince them it ’ south dependable to go all in. When they in truth try to cash out, they ’ re told to send more crypto for ( juke ) fees, and they don ’ t get any of their money back .
woo scams are a distant moment to investment scams, with $ 185 million in reported cryptocurrency losses since 2021 – that ’ s about one in every three dollars reported lost to a romance victimize during this menstruation. [ 8 ] And many have an investing twist besides. These keyboard Casanovas reportedly dazzle people with their supposed wealth and sophism. Before long, they casually offer tips on getting started with crypto endow and serve with making investments. People who take them up on the offer report that what they in truth got was a tutorial on sending crypto to a swindler. The medial individual reported crypto loss to romance scammers is an astounding $ 10,000 .
clientele and government imposture scams are future with $ 133 million in reported crypto losses since 2021. These scams can start with a text about a purportedly unauthorized Amazon buy, or an alarm on-line pop-up book made to look like a security alert from Microsoft. From there, people are reportedly told the fraud is extensive and their money is at risk. The scammers may even get the “ bank ” on the line to back up the history. ( pro tip : it ’ s not the bank. ) In another twist, scammers impersonating frame patrol agents have reportedly told people their accounts will be frozen as function of a drug trafficking probe. These scammers tell people the alone way to protect their money is to put it in crypto : people report that these “ agents ” direct them to take out cash and feed it into a crypto ATM. The “ agent ” then sends a QR code and says to hold it up to the ATM television camera. But that QR code is embedded with the swindler ’ s wallet address. Once the machine scans it, their cash is gone .
People ages 20 to 49 were more than three times a probably as older age groups to have reported lose cryptocurrency to a swindler. [ 9 ] Reports target to people in their 30s as the hardest hit – 35 % of their reported fraud losses since 2021 were in cryptocurrency. [ 10 ] But median individual reported losses have tended to increase with age, topping out at $ 11,708 for people in their 70s. [ 11 ]
here are some things to know to steer clearly of a crypto bunco :
- Only scammers will guarantee profits or big returns. No cryptocurrency investment is ever guaranteed to make money, let alone big money.
- Nobody legit will require you to buy cryptocurrency. Not to sort out a problem, not to protect your money. That’s a scam.
- 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.
To learn more about cryptocurrency scams – and how to spot and avoid scams by and large – visit ftc.gov/cryptocurrency and ftc.gov/scams. Report scams to the FTC at ReportFraud.ftc.gov.
[ 1 ] These figures and figures throughout this Spotlight, unless differently noted, are based on imposter reports made directly to the FTC in the Consumer Sentinel Network database from January 1, 2021 through March 31, 2022 that indicated cryptocurrency as the requital method. Reports provided by Sentinel datum contributors are excluded because of inconsistencies among contributors in capturing payment data. Because the huge majority of frauds are not reported, these figures reflect good a modest fraction of the public harm. See Anderson, K. B., To Whom Do Victims of Mass-Market Consumer Fraud Complain? at 1 ( May 2021 ), available at hypertext transfer protocol : //papers.ssrn.com/sol3/papers.cfm ? abstract_id=3852323 ( discipline showed lone 4.8 % of people who experienced mass-market consumer imposter complained to a Better Business Bureau or a government entity ) .
[ 2 ] From January 1, 2021 through March 31, 2022, cryptocurrency was identified as the requital method for 24 % of report dollar losses in fraud reports to the FTC .
[ 3 ] These figures exclude reports that did not specify the type of cryptocurrency .
[ 4 ] From January 1, 2021 through March 31, 2022, 49 % of fraud reports to the FTC indicating cryptocurrency as the payment method acting specified that the victimize started on social media, compared to 37 % in 2020, 18 % in 2019, and 11 % in 2018 .
[ 5 ] From January 1, 2021 through March 31, 2022, $ 1.1 billion was reported to the FTC as lost to imposter originating on social media. Of that number, 39 % was reported as paid using cryptocurrency, followed by bank transfer or requital ( 20 % ), and wire transfer ( 9 % ). 8 % did not indicate a payment method .
[ 6 ] These figures exclude reports that did not specify a social media platform .
[ 7 ] From January 1, 2021 through March 31, 2022, people reported to the FTC that $ 417 million in cryptocurrency was lost to fraud originating on social media. $ 273 million of these losses were to fraud categorized as investment related, followed by love story scams ( $ 69 million ), and business imposters ( $ 35 million ) .
[ 8 ] From January 1, 2021 through March 31, 2022, cryptocurrency was identified as the requital method acting for 29 % of report dollar losses to romance scams.
Read more: COIN STARS
[ 9 ] From January 1, 2021 through March 31, 2022, people ages 20 to 49 submitted fraud loss reports to the FTC indicating social media as the contact method at a rate 3.4 times greater than people 50 and over. About 91 % of imposter reports indicating cryptocurrency as the payment method acting during this period included age information. This age comparison is normalized based on the number of loss reports per million population by age during this period. population numbers were obtained from the U.S. Census Bureau Annual Estimates of the Resident Population for Selected Age Groups by Sex for the United States ( June 2020 ) .
[ 10 ] From January 1, 2021 through March 31, 2022, the share of total reported imposter losses that were lost in cryptocurrency by long time were as follows : 12 % ( 18-19 ), 23 % ( 20-29 ), 35 % ( 30-39 ), 33 % ( 40-49 ), 28 % ( 50-59 ), 19 % ( 60-69 ), 10 % ( 70-79 ), and 2 % ( 80 and all over ). These figures exclude reports that did not indicate historic period .
[ 11 ] From January 1, 2021 through March 31, 2022, the medial individual reported cryptocurrency losses to fraud by age were as follows : $ 1,000 ( 18-19 ), $ 1,600 ( 20-29 ), $ 2,500 ( 30-39 ), $ 3,200 ( 40-49 ), $ 5,000 ( 50-59 ), $ 8,500 ( 60-69 ), $ 11,708 ( 70-79 ), and $ 8,100 ( 80 and over ) .