The Federal Trade Commission (FTC) of the United States has reported that over 46,000 people have lost more than $1 billion to crypto scams in less than two years.
In a report published on June 3, 2022, FTC said cryptocurrency scams have risen by 60 times in size since 2018. They alleged the anonymity of the blockchain transactions has the main driver for crypto scams since the identity of the perpetrator is neither known nor the transaction reversible.
FTC said:
Crypto has several features that are attractive to scammers. There’s no bank or other centralized authority to flag suspicious transactions and attempt to stop fraud before it happens. Once the money’s gone, there’s no getting it back.
The top cryptocurrencies scammers used were bitcoin (70%), Tether USD (10%), and ether (9%).
FTC also noted that crypto scammers hunt for their victims mostly via social media. It said nearly half the people who fall victims to crypto since 2021 said it started with an ad, post, or message on a social media platform. The top platforms were Instagram (32%), Facebook (NASDAQ:FB) (26%), WhatsApp (9%), and Telegram (7%).
Furthermore, it said most social media scams come disguised as business opportunities due to people’s tendency to fall for fake promises.
FTC added:
Indeed, since 2021, $575 million of all crypto fraud losses reported to the FTC were about bogus investment opportunities, 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.
Meanwhile, Romance scams accounted for $185 million in cryptocurrency since 2021.