According to a report from the FTC, over 46,000 people lost over $1 billion in cryptocurrency from scams since the start of 2021.
The losses in 2021 ($680 million) were nearly six time what they were in 2018. In the first quarter 2021, reported cryptocurrency fraud losses already totaled $329 million, said the FTC.
Nearly four out of every $10 reported lost to a fraud originating on social media was lost in crypto, far more than any other payment method. About a third of the scams originated on Instagram, followed by Facebook (26%), WhatsApp (9%), and Telegram (7%) – typically starting with an ad, post or direct message.
The median individual loss was $2,600, and people 20-49 years old are more than three times more likely to fall victim to cryptocurrency fraud, FTC said. The top three cryptocurrencies people said they used to pay scammers were Bitcoin (70%), Tether (10%), and Ether (9%).
“There’s no bank or other centralized authority to flag suspicious transactions and attempt to stop fraud before it happens. Crypto transfers can’t be reversed – once the money’s gone, there’s no getting it back,” said the FTC data spotlight report. And most people are still unfamiliar with how crypto works. These considerations are not unique to crypto transactions, but they all play into the hands of scammers.”
Most of the scams on social media involved bogus investment opportunities. Romance scams and business/government scams also trick people into sending or “investing” crypto.
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