Crypto Scams Cost Americans Over $1 Billion Last Year, FTC Reports
And those numbers likely represent a small fraction of total losses, because most crimes go unreported, according to Emma Fletcher, senior FTC data researcher who authored the report.
Investment scams promising quick and easy paydays account for the bulk of crypto fraud, totaling $575 million in losses. Fraudsters frequently lure victims on social media and then show that their investments are generating fake earnings. In some cases, the FTC has found, investors are successful in making “test” withdrawals, convincing them that the arrangement is sound and encouraging them to inject more money that they cannot then recover.
“Since investment scams are really behind this, it’s very important that people understand that any promise of huge returns, or that your investments can be multiplied quickly, is obviously a scam,” he said. said Fletcher. “No return on a crypto investment is guaranteed.”
An ex-cop fell in love with Alice. Then he fell in love with his $66 million crypto scam.
So-called romance scams — in which thieves posing as potential love interests trick people on dating apps or social media, then persuade them to invest in fraudulent crypto schemes — cost victims $185 million. dollars, according to the report. A single such scam last year likely killed more than 5,000 people and took away more than $66 million, according to a Washington Post investigation.
People between the ages of 20 and 49 were more than three times more likely than older cohorts to be taken in by crypto fraud, the FTC found. And crypto scams accounted for 35% of fraud experienced by people in their 30s.
Crypto’s lack of federal oversight has helped make it a magnet for criminals. “There is no bank or other centralized authority to flag suspicious transactions and attempt to stop fraud before it happens,” the FTC report said. Additionally, “crypto transfers cannot be undone – once the money is gone, there’s no way to get it back.”
Fletcher said potential crypto investors, in addition to being wary of promises of big returns or incentives from dating app matches, should avoid social media placements. “Even when it’s someone who could very well be their friend, the account might have been hacked,” she said.