Security

Cryptocurrency scammers claimed more than $1B since 2021

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June 7, 2022

Cryptocurrency scammers have taken more than $1 billion from 46,000 people since 2021, according to a report from Federal Trade Commission. Cryptocurrency-related crimes also make up one out of every four dollars lost to fraud — more than any other payment method, according to a report by CNN.

Of those who were scammed, 70% used bitcoin to pay the scammers. In addition, those in the 25-40 age group were three times more likely to lose money to these scams.

Victims were often lured in through messages on social media, especially fake investment opportunities, which accounted for $575 million of all cryptocurrency losses.

"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.

Big names within the cryptocurrency industry have been indicted for allegedly participating in scams. For example, in February a federal grand jury in San Diego indicted the founder of BitConnect allegedly organizing a Ponzi scheme and in May, a jury indicted the CEO of Mining Capital Coin for allegedly "orchestrating a $62 million global investment fraud scheme."

With these scams, typically scammers will claim that their investors will receive large returns, but they will end up taking the money for themselves.

The FTC also warns to be wary of individuals on online dating sites who try to give cryptocurrency investment advice.

"If a new love interest wants to show you how to invest in crypto, or asks you to send them crypto, that's a scam," the FTC said.