The Federal Trade Commission (FTC), an agency which seeks to protect U.S. consumers against fraud, revealed that investors have lost over $80 million to cryptocurrency investment scams between October 2020 and March 2021.
Crypto Scam Reports Skyrocket
According to a report published by the FTC on Monday (May 17, 2021), the agency noted that it has witnessed an increase in crypto-related scams since October 2020. The FTS data revealed that it received close to 7,000 reports from consumers between Q4 2020 and Q1 2021, with investors losing $80 million within the period.
Meanwhile, between Q4 2019 and Q1 2020, the agency got 570 reports related to crypto scams, which totaled $7.5 million in losses. Comparing both periods, the number of reported cases increased 12-fold, while reported losses skyrocket almost 1000%.
Furthermore, FTC stated that individuals between the ages of 20 to 49 “were over five times more likely to report losing money on cryptocurrency investment scams than older age groups.” The report added:
“In contrast, people 50 and older were far less likely to report losing money on cryptocurrency investment scams. But when this group did lose money on these scams, their reported individual losses were higher, with a median reported loss of $3,250.”
The U.S. agency further detailed the types of scams that rogue actors used to lure their victims. One of them was “giveaway scams” by impersonators online. According to the FTC, investors sent over $2 million worth of crypto to Elon Musk impersonators in the period of six months.
Indeed, scammers have been known to leverage on the popularity of celebrities to get people to send their money. Back in July 2020, hackers managed to hack Twitter accounts belonging to several personalities and fooled people into sending their bitcoin to be doubled.
The fraudsters managed to get about $120,000 in profit. As reported by CryptoPotato in February, scammers also tried to trick fans of popular K-pop boy band BTS, into participating in cryptocurrency giveaways.
Investors Should be Wary of Bogus Crypto Investment Schemes
Other methods used by fraudsters include romance scams, where one person believed to be in a long-distance relationship, was lured into sending their crypto to a scammer. The FTC noted that of all the ways to get people to part with their crypto, investment scams were the most popular method.
Recently, members of the WallStreetBets (WSB) Reddit forum were targets of a likely crypto scam. An account called “WallStreetBets – Crypto Pumps”, not affiliated with the subreddit group told users to send ETH or BNB to receive a token call WSB finance. While the tokens were never delivered, the crypto over 3,451 BNB was withdrawn from the wallet, which was worth over $2.1 million at the time.
With bitcoin and crypto growing both in price and adoption, scammers continue to seek ways to steal from unsuspecting individuals. The onus is on the investor to DYOR (Do Your Own Research) before jumping on any crypto investment scheme.