Crypto appears to have resurrected internet fraud, which is nothing new. Since 2021, at least 46,000 people have been swindled by crypto frauds, according to a new FTC report.
On Friday, the Federal Trade Commission (FTC) reported that over $1 billion had been lost by approximately 46,000 people since 2021 due to crypto scams. According to the report, $680 million was lost in 2021, and about $329 million was lost in Q1 2022 due to these scams.
It is estimated that each victim lost an average amount of $2600, with most of the money being held in Bitcoin. Scammers received more than two-thirds of their cryptocurrency from the scam in Bitcoin, with Tether and Ether each receiving a small percentage of the total.
Cryptocurrency scam losses have increased 60-fold since 2018, according to the most recent findings. It was found that nearly half of these losses were caused by people engaging in fraudulent activity on social media. According to the FTC, about 40% of the money victims lose to social media scammers is in cryptocurrency.
Instagram, Facebook, WhatsApp, and Telegram are some of the most frequently used platforms by scammers, who rely on deceptive investment schemes to defraud unsuspecting victims out of their money by promising unrealistically high returns in a short period of time. More than $575 million has been lost to these investment scams since 2021, according to the Federal Trade Commission (FTC).
Romance scams came in second place with $185 million in revenue, according to the report. Third is a $133 million loss in business and government impersonation scams. Investors are advised by the FTC not to choose investments that guarantee returns, not to buy crypto at the direction of another to protect their wealth, and not to take investment advice from an online love interest to avoid becoming victims of these scams.
In the first quarter of 2022, internet fraudsters lost nearly half as much money in crypto as they did in the entire year of 2021. FTC estimates that these figures do not represent the full extent of this crisis. The FTC, for example, estimates that only 5% of people who lose money to crypto fraud report it to them in another paper.
On the proliferation of scams in the cryptocurrency space, Billy Markus co-created Dogecoin, which was created as a joke in 2013. He claimed that investors are encouraging it.