NEW YORK (Dispatches) - Cryptocurrency scammers have stolen over $1 billion from 46,000 people since the start of 2021, a new Federal Trade Commission report says.
The FTC rang the alarm bells, saying crypto-related crimes amount to about one out of every four dollars reported lost to fraud -- more than any other payment method. The median individual reported loss was $2,600.
The vast majority of those who reported being bilked used Bitcoin to pay scammers, at 70%, followed by Tether and Ether. The victims typically are part of a younger age group -- those aged 25-40 are three times as likely to lose money due to fraud.
Crypto scams are becoming increasingly popular, shooting up 60 times higher than in 2018. It has all the elements that give scammers an advantage -- no bank to flag suspicious transactions, irreversible transfers and novice investors that are often largely unfamiliar with how crypto works.
The FTC’s warning comes at a volatile time in the crypto market. Since Bitcoin hit its peak of $69,000 in November, it’s lost more than half its value as investors have pulled out of riskier assets due to rising interest rates.
Nearly half of those who reported losing money to a crypto scam in 2021 said they were lured in through an online post or social media message. More than half of the posts were seen on Facebook or Instagram.
Fake investment opportunities were behind $575 million of all crypto losses reported to the FTC, far more than any other fraud type.
“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,” the FTC report said.
Last month, the SEC announced it was hiring more than a dozen new employees to combat cryptocurrency fraud.
The FTC said there are steps to take to avoid getting scammed. The first is to steer clear of anyone who promises guaranteed returns.
Romance scams also play a role in this kind of fraud -- with a median individual reported crypto loss of $10,000. The FTC also warned not to mix online dating and investment advice.