The U.S. Federal Trade Commission has called social media and crypto a “flammable combo for fraud.” Almost half of all crypto-related scams in 2021 were spread through social media platforms.
The report , released on Friday, said scammers stole up to $1 billion in cryptocurrencies over the course of the year. That's more than five times what it was in 2020 and almost 60 times what it was in 2018.
On March 31, the amount of stolen cryptocurrencies was already almost half of the total amount of stolen cryptocurrencies in 2021. This shows that the momentum is building.
The FTC found that Instagram (32 percent), Facebook (26 percent), WhatsApp (9 percent), and Telegram (7 percent) are the top crypto scam platforms.
What is striking here is that the social media platform Twitter, which is used the most by the crypto community, is not mentioned here, despite the fact that there is a lot of spam and countless fraudulent bots advertising alleged crypto sweepstakes .
According to the scam reports to the FTC's Consumer Sentinel Network, the most common type of crypto scams are investment scams. These accounted for $575 million of the total amount of funds stolen.
"These scams often promise huge returns for potential investors by investing in these cryptocurrency systems. However, people report that they have lost all the money they 'invest'."
According to the FTC, in the most common systems, what is known as an "investment manager" contacts a consumer and promises to make their money bigger. But only if the consumer buys cryptocurrencies and transfers them to their online account.
In other schemes, scammers pose as celebrities and promise to double or triple the amount of cryptocurrency transferred. Cash and other cryptocurrencies are often promised in exchange.
The FTC also mentioned scams where one is supposed to invest in alleged works of art, precious stones and rare coins, as well as alleged investment seminars and advisory services.
So-called romance scams also account for a large proportion of crypto fraud-related losses. Here $185 million was stolen by scammers fooling the victim into having a romantic relationship and tricking them into investing in a fraudulent crypto scheme .
$133 million was stolen after scammers contacted consumers claiming their assets were at risk due to a scam or government investigation.
"These scams often begin with an SMS about an allegedly unauthorized Amazon purchase, or with an alarming online pop-up that looks like a security warning from Microsoft. This is where people are told the scam is very serious and their money is in Danger."
The scammers then pose as bank representatives to protect the victim's cryptocurrency.
Scammers have also posed as border guards and claimed victims' fiat accounts were frozen as part of drug trafficking investigations. These scammers then tell people the only way to protect their money is to invest in cryptocurrencies. Then you should withdraw cash and deposit it into a crypto ATM. Then the money is supposed to be sent to the fraudster's wallet address under a pretext.
The report shows that people between the ages of 20 and 49 are the most likely to have lost cryptocurrencies to scammers. The 30-year-olds make up the largest proportion here at 35 percent.
Depending on the age group, the amount of lost cryptocurrencies increases. On average, people over 70 lose up to $11,708. This compares to just $1,000 for 18- and 19-year-olds.
An article on the FTC's consumer advice website offers advice on how to spot such scams:
Only scammers ask for payment in cryptocurrency. No reputable company will require you to transfer cryptocurrencies in advance. Neither to buy anything nor to protect your money. This is always a scam.
Only scammers guarantee profits or high returns. Don't trust people who promise them that they can make money quickly and easily in the crypto market.
Never confuse online dating and investment advice. If you meet someone on a dating website or app and they want to show you how to invest in crypto or ask you to transfer crypto to them, it is a scam.
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