Crypto scams hit all-time-high, FTC warns

It’s no secret that crypto-related cybercrime is on the rise, and scams are becoming increasingly more sophisticated. Last month, deepfakes of Elon Musk and other public figures promoting seedy crypto projects went viral.

Now, the US Federal Trade Commission (FTC) has revealed the severity of financial losses from crypto scams in a report published on Friday.

The commission’s findings have proved that cryptocurrency has become an “alarmingly common” target for scammers. 

“Since the start of 2021, more than 46,000 people [in the US] have reported losing over US$1 billion in crypto to scams – that’s about one out of every four dollars reported lost, more than any other payment method. The median individual reported loss? A whopping $2,600. The top cryptocurrencies people said they used to pay scammers were Bitcoin (70 per cent), Tether (10 per cent), and Ether (nine per cent).”

Reported losses in 2021 were six times higher than 2018 figures.

Social media is identified as a common source of scams. Approximately half of all victims claim to have been targeted via ads, posts, and messages on social media platforms – namely, Instagram (32 per cent), Facebook (26 per cent), WhatsApp (nine per cent), and Telegram (seven per cent).

It’s said that the majority of these losses began as investment scams. Since 2021, US$575 million worth of the lost funds was due to bogus investment opportunities, with false promises of sky-high gains and financial freedom. 

Following this, romance scams were the second most common, with US$185 million in reported digital currency losses over the past year. In fact, around one in every three dollars was lost to this type of fraud.

It’s worth noting that romance scammers sometimes double up as investment scammers – reeling in unsuspecting victims and then offering investment ‘advice’. 

The average individual loss to this type of con is a shocking US$10k.

Meanwhile, business and government impersonation scams, which often begin with messages about unauthorised purchases, totaled US$133 million in defrauded crypto.

According to the FTC, those aged between 20 and 49 were over three times more likely than older age groups to have reported being scammed out of digital currency. 30-somethings were the hardest hit – with 35 per cent of their reported losses from scams being in crypto.

In total, scammers have stolen over US$14 billion worth of cryptocurrency last year.