More Than $1B Lost In Crypto Scams Since 2021, FTC Reveals

According to a new Federal Trade Commission (FTC) investigation, cryptocurrency scammers have taken over $1 billion from 46,000 victims since the start of 2021, Ramishah Maruf reported for CNN.

Photo Insert: Scams using cryptocurrency are on the rise, with an increase of 60 times since 2018.

The Federal Trade Commission (FTC) issued a warning on Friday (Saturday, June 4, 2022, in Manila), claiming that crypto-related crimes account for one out of every four dollars lost to fraud, which is more than any other payment method. Individuals reported a median loss of $2,600.

The vast majority of those who claimed to have been duped paid scammers with Bitcoin (70 percent), followed by Tether and Ether. The victims are usually younger people; individuals aged 25-40 are three times more likely to lose money as a result of fraud.

Scams using cryptocurrency are on the rise, with an increase of 60 times since 2018. It has all of the characteristics that benefit scammers: no bank to flag questionable transactions, irreversible transfers, and rookie investors who are often unaware with how crypto works.

The FTC's warning comes at a time when the cryptocurrency market is extremely volatile. Bitcoin has dropped more than half of its value since hitting a high of $69,000 in November, as investors flee riskier assets owing to rising interest rates.

In 2021, about half of those who lost money to a crypto scam stated they were drawn in by an internet post or social media message. More than half of the posts were shared on social media platforms like Facebook and Instagram.

Fake investment opportunities were responsible for $575 million in cryptocurrency losses reported to the FTC, significantly more than any other sort of fraud. The FTC investigation stated, "The stories people share about these scams describe a perfect storm: false promises of easy money paired with people's limited crypto understanding and experience."

A federal grand jury in San Diego indicted BitConnect's founder in February for allegedly running a $2.4 billion global Ponzi scam. The founder was accused of misleading investors about the cryptocurrency's "lending program," claiming the company's proprietary technology would bring substantive returns to investors by tracking cryptocurrency exchange markets.

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