Cryptocurrency buzz drives record investment scam losses

Investing in cryptocurrency means taking on risks, but getting scammed shouldn ’ thymine be one of them. Reports to the FTC ’ south Consumer Sentinel 1 suggest scammers are cashing in on the buzz around cryptocurrency and luring people into bogus investment opportunities in record numbers. Since October 2020, reports have skyrocketed, with closely 7,000 people reporting losses of more than $ 80 million on these scams. 2 Their reported median loss ? $ 1,900. Compared to the same period a year earlier, that ’ second about twelve times the phone number of reports and closely 1,000 % more in report losses. 3
Some say there ’ second a Wild West vibration to the crypto culture, and an component of mystery excessively. Cryptocurrency enthusiasts congregate on-line to chat about their shared passion. And with bitcoin ’ randomness respect soaring in recent months, new investors may be eager Reports and reported losses to cryptocurrency investment scams increased sharply from October 2020 through March 2021 to get in on the legal action. All of this plays correct into the hands of scammers. They blend into the scene with claims that can seem plausible because cryptocurrency is stranger territory for many people. Online, people may appear to be friendly and uncoerced to contribution their “ tips. ” But that can besides be part of the ruse to get people to invest in their scheme. In fact, some of these schemes are based on referral chains, and work by bringing in people who then recruit newfangled “ investors. ”
many people have reported being lured to websites that look like opportunities for investing in or mining cryptocurrencies, but are bogus. They much offer several investment tiers – the more you put in, the bigger the supposed render. Sites use fake testimonials and cryptocurrency slang to appear credible, but promises of enormous, guaranteed returns are just lies. These websites may even make it look like your investment is growing. But people report that, when they try to withdraw supposed profits, they are told to send even more crypto – and end up getting nothing second .
then, there are “ game show scams, ” purportedly sponsored by celebrities or other sleep together figures in the cryptocurrency space, that promise to immediately multiply the cryptocurrency you send. But, people report that they discovered later that they ’ five hundred simply sent their crypto directly to a swindler ’ second wallet. For case, people have reported sending more than $ 2 million in cryptocurrency to Elon Musk impersonators over merely the past six months.

Scammers even use on-line date to draw people into cryptocurrency investment victimize. many people have reported believing they were in a long-distance relationship when their new love started chatting about a hot cryptocurrency opportunity, which they then acted on. About 20 % of the money people reported losing through romance scams since October 2020 was sent in cryptocurrency, and many of these reports were from people who said they thought they were investing. 4
Since October 2020, people ages 20 to 49 were all over five times more probably to report losing money on cryptocurrency investment victimize than older historic period groups. 5 The numbers are particularly striking for people in their 20s and 30s : this group reported losing far more money on investment scams than on any other type of imposter, 6 and more than one-half of their reported investment scam losses were in cryptocurrency. 7 In contrast, people 50 and older were army for the liberation of rwanda less likely to report losing money on cryptocurrency investment victimize. But when this group did lose money on these scams, their reported individual losses were higher, with a medial report personnel casualty of $ 3,250 .
To be clear, while investment scams top the number as the most lucrative way to obtain cryptocurrency, scammers will use whatever fib works to get people to send crypto. That often involves impersonating a government authority or a well-known business. For case, many people have told the FTC they loaded cash into Bitcoin ATM machines to pay imposters claiming to be from the Social Security Administration. Others reported losing money to scammers posing as Coinbase, a well-known cryptocurrency change. In fact, 14 % of reported losses to imposters of all types are now in cryptocurrency. 8
here are some things to know to play it safe ( erbium ) when it comes to cryptocurrency :

  • Promises of guaranteed huge returns or claims that your cryptocurrency will be multiplied are always scams.
  • The cryptocurrency itself is the investment. You make money if you’re lucky enough to sell it for more than you paid. Period. Don’t trust people who say they know a better way.
  • If a caller, love interest, organization, or anyone else insists on cryptocurrency, you can bet it’s a scam.

To learn more about cryptocurrency scams, visit ftc.gov/cryptocurrency. If you spot a victimize, report it to the FTC at ReportFraud.ftc.gov .


1 This Spotlight is based on reports from consumers to the FTC or to any Consumer Sentinel Network data subscriber .
2 This figure is based on 6,792 cryptocurrency investment scam reports submitted from October 1, 2020 through March 31, 2021. Cryptocurrency investment scam reports here and throughout this Spotlight are defined as reports categorized as investment related fraud that indicate cryptocurrency as the payment method acting. The investment related imposter category includes the come fraud subcategories : art, gems and rare mint investments, investment seminars and advice, stocks and commodity futures trade, and many-sided investments. About 92 % of cryptocurrency investment victimize reports from October 1, 2020 through March 31, 2021 are classified as assorted investments .
3 From October 1 2019 through March 31, 2020, people submitted 570 cryptocurrency investment victimize reports indicating $ 7.5 million in sum losses .
4 This calculate is based reports submitted from October 1, 2020 through March 31, 2021 that were classified as romance scams. Reports that did not specify a payment method acting are excluded. Of these, 1,147 reports totaling $ 35 million in report losses indicated cryptocurrency as the payment method. These reports are clear-cut from reports classified as investment related fraud, with no overlap between the two .
5 About 86 % of cryptocurrency investment related fraud reports submitted from October 1, 2020 through March 31, 2021 included old age information. This historic period 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 ).

6 This ranking is based on a comparison of Sentinel imposter subcategories. From October 1, 2020 through March 31, 2021, consumers ages 20-39 reported $ 114 million in sum losses on frauds classified as many-sided investments. Excluding unspecified reports, the subcategory with irregular highest reported losses by this historic period group was on-line denounce with $ 64 million in report losses. These figures are not limited to reports indicating cryptocurrency as the payment method .
7 This calculate is based on reports submitted from October 1, 2020 through March 31, 2021 that were categorized as investment related imposter and indicated a consumer age of roll of 20 to 39. Reports that did not specify a payment method are excluded. Of these, 3,581 reports totaling $ 35 million in report losses indicated cryptocurrency as the payment method .
8 This figure is based on reports from October 1, 2020 through March 31, 2021 that were categorized as imposter scams. Reports that did not specify a payment method are excluded. Of these, 3,494 reports totaling $ 64 million in report losses indicated cryptocurrency as the payment method. The imposter scam category includes the surveil fraud subcategories : business imposters, family and ally imposters, government imposters, romance scams, and technical school support scams .

Leave a Comment

Your email address will not be published.