The FTC reports crypto scam victims have lost more than $1 billion, and nearly 25% of scams use crypto as a payment method.
Follow Engadget, the crypto world is continuing to attract scammers. Victims have reported losses totaling more than $1 billion to crypto scams since early 2021, according to an FTC report published June 3. Between January 2021 and March 2022, more than 46,000 individuals filed crypto-related fraud reports with the agency.
Cryptocurrency scams are on the rise.
Ironically, the most popular coins used in scams are also the most widely used and have top stability. A total of 70% of scams used Bitcoin as a payment method, followed by Tether (10%) and Ether (9%). Ether is the primary currency of choice for NFT, a relatively new crypto market where scammers and hackers are thriving.
Cryptocurrency investment scams were the most common type of scam reported to the FTC, causing an estimated $575 million in losses. Usually, these scams target amateur investors by promising them large profits in return for their initial investment.
“Investment scammers claim they can quickly and easily make huge profits for investors. But those crypto “investments” go straight to the scammer’s wallet,” FTC’s Emma Fletcher wrote in a blog post.
“Romantic” scams also make up a large portion of reported scams, totaling $185 million in losses. Many scammers approach individuals via social networks or dating apps. According to CoinTelegraph, the type of dating app scam known as “pig slaughtering” – where criminals build fake relationships with victims to trick them into investing in cryptocurrencies – has become very popular. .
It is important that the FTC report is only a small summary of the extent of the crypto fraud that has taken place, as the agency is relying on direct reports submitted by victims. An FTC article estimates that less than 5% of scam victims report incidents to a government entity, and potentially an even smaller number reports to the FTC.
As cryptocurrencies become more popular, the number of scams also increases. Blockchain platform Chainanalysis estimates that illicit addresses received more than $14 billion in crypto last year, nearly double the amount in 2020.
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