According to a Friday (June 3), crypto scams claimed more than $1 billion in consumer losses between January 2021 and March 2022 press release by the Federal Trade Commission (FTC).
Most of the reported losses were related to fake cryptocurrency investment opportunities, totaling $575 million since January 2021.
The publication said that one in every four dollars reported lost to fraud was paid in cryptocurrency, and the reports appear to indicate that cryptocurrency is becoming a preferred fraud choice for the criminals.
Many of the scams revolve around the idea that victims can earn “huge returns” by investing in criminals’ cryptosystems. However, many victims lose most or all of the money they invested.
The FTC found that other popular scams were romance scams, where a fake love interest tries to trick a victim into investing in a crypto scam, and business and government identification, where the scammers target consumers by making claims that their funds are at risk for a government-related reason, with the solution being to convert the funds into crypto.
The scams usually start on social media, and almost half of the victims said their problems started online, either with an ad or a social media post.
Additionally, people aged 20-49 were more than three times more likely to have lost money to a crypto scam than older people. However, older age groups reported losing more money on average. Crypto-related scams and scams have rife since the pandemic began, when the shift to digital prompted scammers to take advantage.
In another case, PYMNTS wrote that some scammers hijack Twitter accounts to promote shady crypto platforms that end up compromising a victim’s private data.
See also: Scammers used Twitter’s crypto community to steal information
The scammers reportedly posed as journalists, crypto apps, and non-fungible token (NFT) projects to steal the digital money, usernames, and passwords.