FTC Data Reveals Big Jump In Crypto Investment Scams, Losses Totaling $80M
A new consumer protection data spotlight from the U.S Federal Trade Commission (FTC) revealed that consumers lost more than $80 million to cryptocurrency investment scams since October 2020.
Millennials Lost More Money to Scams
Data compiled from the last quarter of 2020 and the first quarter of 2021 showed that almost 7,000 investors were swindled by scammers who lured them into bogus crypto investment opportunities.
The report notes:
“Sites use fake testimonials and cryptocurrency jargon to appear credible, but promises of enormous, guaranteed returns are simply lies. These websites may even make it look like your investment is growing. But people report that, when they try to withdraw supposed profits, they are told to send even more crypto – and end up getting nothing back.”
The median amount lost to the investment scams and reported by these consumers was $1,900. According to the FTC, this figure is about twelve times the number of reports and nearly 1,000% more in reported losses compared to the same period earlier.
This year has seen a turnaround in the cryptocurrency scene as the hype around digital assets has spiraled. This has seen scammers taking advantage and cash in on the buzz, thereby luring people into bogus investment opportunities.
Young people have been more on the receiving end. According to the FTC, those in their 20s and 30s lost more money to investment scams than any other form of fraud over the six months, with more than half of their investment scam losses in crypto assets.
Investors Were Duped Elon Musk Crypto Identity Scams
One of the most common forms of crypto scam is when con artists pose as celebrities or renowned figures and promise to multiply the cryptocurrency that investors send to their wallets but pocket it instead.
According to the FTC, scammers impersonating Elon Musk were on the rise as consumers reported losing more than $2 million in such scams since October.
This isn't the first time that scammers would exploit the Tesla CEO's identity.
Earlier this month, scammers made $5 million worth of Dogecoin through fake giveaways using Elon Musk's appearance on the Saturday Night Live show hosted on May 8. The scammers tricked the victims into transferring Dogecoin to a fake address with the belief that they would receive twice the Dogecoin they sent.
In 2020, crypto scammers took over prominent accounts on Twitter to dupe hundreds of crypto investors. The accounts targeted in the scam include US President Joe Biden, Barack Obama, Jeff Bezos, and Bill Gates.
The scammers reportedly used the high profile accounts to post tweets asking followers to send bitcoin to a specific anonymous address. They received 400 payments in Bitcoin, making a total value of at least $121,000.
The FTC has repeatedly advised investors to steer clear investments that promise guaranteed huge returns or claims that your cryptocurrency will be multiplied because they are usually scams. To help DOGE scams, the FTC also says investors should be wary of any callers, supposed love interests, organizations, or anyone else who insists on crypto.