The Federal Trade Commission (FTC) issued a report on crypto scammers cashing in on the crypto craze. According to the analysis, Americans have lost over $1 bln to crypto scams since the beginning of 2021.
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Based on the reports, scammers widely use social media to realize their activities. Almost half the people who reported losing crypto in a fraud case, said it started with an advertisement, publication, or message on social media sites.
Losses in 2021 were around sixty times higher than they were in 2018. Almost four out of every ten dollars reported lost to a scam started on social media was lost in crypto. This indicator makes cryptos the leader in payment methods to scams. Most common platforms used by scammers were Instagram (32%), Facebook (26%), WhatsApp (9%), and Telegram (7%).
Since the start of 2021, around 46,000 people have reported losses because of cryptocurrency scams. On average, a person lost around $2,600. 70% of the lost cryptos were in Bitcoin, 10% in Tether (USDT), and 9% in Ether.
FTC says although crypto is yet to become a mainstream payment method, reports show that it's an extremely common method for scammers to capture peoples' money.
The most common type of fraud is investment scams. Since 2021, $575 M of all crypto scam losses reported on the FTC were about investment opportunities as if people would make easy money making investments sending their money to some addresses.
Romance frauds are in second place. This way, scammers got $185 M. The typical scenarios for these cases are when they offer tips on getting started with crypto investing and help with making investments. Typically, scammers send a tutorial to people that explains how to send cryptos to their wallets. The average loss through these cases is $10,000.