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With the rising prices and popularity of cryptos, such as Bitcoin (BTC), Ether (ETH), and Dogecoin (DOGE), digital assets have become very enticing to online scammers. A recent report by FTC revealed a more than ten-fold year-over-year rise in crypto investment scams for the six-month period from October 2020 to March 2021.
According to the Federal Trade Commission (FTC), consumers have reported losing more than $80 million due to crypto scams. The figure represents a more than ten-fold increase year-over-year based on FTC’s data analysis.
The investment scams figure was based on the nearly 7,000 cases reported by consumers from the last quarter of 2020 until the first quarter this year. The FTC also revealed that the mean amount that these victims lost to such scams was $1,900.
Some age groups are more susceptible to crypto investment scams compared to others. For instance, those from 20 to 49 years of age are said to be over five times more likely to report losing money to crypto scams compared to older age groups.
However, the report also stated that those in their 20s and 30s lost more money to investment scams compared to any other type of fraud. Victims also reported that more than half of their losses were in cryptos.
The FTC said that victims reported several forms of crypto investment scams. One scam starts by offering investment “secrets” or “tips” on online message boards. Clicking on these tips will lead potential victims to fake investment sites.
Another type of crypto scam mentions the name of known pro-crypto celebrities and famous personalities to get the attention of potential victims. Scammers promise their victims that the celebrity will multiply any amount of crypto victims send to the supposed celeb’s wallet.
For instance, victims lost more than $2 million to scammers who pretended to Elon Musk using this scheme. Musk, the CEO of both Tesla and SpaceX is known for being a crypto enthusiast so it’s easier for scammers to fool people using his name.
