Crypto scammers have defrauded more than 46,000 people over $1 billion since the start of 2021, according to a report released by the Federal Trade Commission on Friday.
Fraudsters are capitalizing on the increased popularity of acquiring digital wealth quickly.
With almost $1 out of every $4 in these frauds paid in cryptocurrency, the FTC research suggests that it has become the preferred method of payment for many criminal groups.
According to the FTC, Bitcoin (70 percent), Tether (10 percent), and Ether (9 percent) were the leading cryptocurrencies used to pay crypto scammers. In November of 2021, Bitcoin reached a new all-time high of $69,000, as the enthusiasm for cryptocurrency reached its peak.
Suggested Reading | ‘Crypto Winter’ Forcing Exchanges In Latin America To Sack Employees
The losses in cryptocurrency in 2021 were about 60 times bigger than in 2018, FTC reported. (IT PRO)
Losses From Crypto Scammers Increasing
The damages in cryptocurrency that year were about 60 times greater than in 2018. Emma Fletcher, the senior data researcher at the Federal Trade Commission who authored the analysis, said these figures probably indicate only a small portion of the total losses because the majority of crimes go unreported.
According to the FTC, nearly 50 percent of the victims who reported being victimized in an online fraud claimed it began with an ad, post, or private message on a social media platform.
A huge chunk of the estimated losses, approximately $575 million, were attributable to fraudulent investment opportunities in which crypto scammers touted the possibility of big profits from investing in cryptocurrency ventures, but individuals who did so lost their whole life savings.
Bad Guys Lurking In Top Social Media Platforms
Instagram (32 %), Facebook (26 %), WhatsApp (9 %), and Telegram were the main platforms named in complaints lodged before authorities.
Consumers had been duped by a slew of other bogus tales, including investment schemes. The second most prevalent were romance scams, in which a potential romantic partner would convince a victim to invest in a Bitcoin or other related crypto scam.
Reports also indicated that fraudsters would target consumers by impersonating a business or government and stating that their funds were at risk of fraud or investigation until converted to crypto.
BTC total market cap at $561.9 billion on the weekend chart | Source: TradingView.com
The FTC warns in its report:
“There is no bank or other centralized authority to flag questionable transactions and seek to prevent fraud before it occurs… these factors are not unique to cryptocurrency transactions, but they all play into the hands of con artists.”
Meanwhile, the British national reporting center for fraud and cybercrime received 7,118 reports of cryptocurrency-related fraud last year.
According to the City of London Police, by the end of September, crypto scammers had defrauded victims of $200 million, a 30 percent increase over the previous year.
Suggested Reading | Ethereum Hitting $10K By End Of 2022 Still Possible, Bitmex Former CEO Says
Featured image from Coin Republic, chart from TradingView.com