Nearly half of crypto asset loss victims report that they have been duped through advertisements, posts, or messages on social media platforms.
The U.S. Federal Trade Commission (FTC) said social media and cryptocurrencies are a combination of "flammable as straw and fire" to scams. In particular, nearly half of all cryptocurrency-related scams come from "bogus investment opportunities."
More than 46,000 people have reported losing crypto assets due to fraud with a total loss value of more than $1 billion. This number is more than 5 times higher than in 2020 and nearly 60 times compared to 2018.
Platforms used to scam cryptocurrencies
According to FTC statistics, Instagram (32%), Facebook (26%), WhatsApp (9%) and Telegram (7%) are the top platforms used to scam cryptocurrencies. However, in this list, Twitter is not mentioned even though it is a social platform widely used by the cryptocurrency investment community , and there is a lot of spam and rogue bots touting virtual gifts.
How to scam cryptocurrencies
The most common way cryptocurrency scams are investment-related scams, which account for $575 million out of a total of $1 billion.
The "investment manager" contacts the consumer, promising to increase the investment capital after consumers buy cryptocurrencies and transfer to their online accounts. The victims said they were promised huge profits when participating in cryptocurrency investment programs, however they later lost all their initial investment capital.
Besides, online scammers can impersonate a celebrity to receive deposits and take their credibility to commit to investment returns.
The FTC also lists scams involving investments in fake art, gemstones and rare coins, holding seminars and offering investment advice.
One of the typical scams is "virtual dating". Fake accounts approach and take advantage of the affections of the light-hearted, frail to entice them to invest in cryptocurrencies, of which the largest loss is statistically up to $185 million.
Corporate and government impersonation scams came in third with a total of $133 million, in which scammers targeted consumers, claiming that their money was at risk because of the government's investigation.
These scams can start with a text about an amazon purchase or an alarming online window created that looks like a security alert from Microsoft. People are told their money is at risk and then the scammers will pretend to be representatives of the bank to secure the money for them.
In other cases, scammers impersonated border patrol agents who told people their Fiat accounts were frozen due to drug trafficking investigations, and the only way to protect money was to invest in cryptocurrencies. Users were instructed to take cash and top up at cryptocurrency ATMs and by doing so, the money was reached the wallet addresses of the scammers.
Statistics on the likelihood of losing money by age
The report found that people between the ages of 20 and 49 were the most likely to lose cryptocurrencies to scammers, especially those in their 30s who suffered the most, accounting for 35% of the total losses caused by reported cryptocurrency fraud .
The number of stolen cryptocurrencies increases with the age group. The losses of those in their 70s amounted to $11,708, $1,000 more than those aged 18-19.
How to avoid cryptocurrency scams
An article on the FTC's Consumer Advisory website details several ways to avoid cryptocurrency scams:
- Only scammers require payments in cryptocurrencies. No legitimate business requires you to deposit cryptocurrencies first – don't buy something and don't protect your money. It's always been a scam.
- Only scammers guarantee large profits or profits. Don't trust those who promise that you can make money quickly and easily on thecryptocurrency marketplace.
- Never combine dating advice and investing online. If you meet someone on a dating site or app and they want to show you how to invest in cryptocurrencies or ask you to send them cryptocurrency, it's a scam.
