New analysis from the Federal Trade Commission found consumers reported losing over $1Billion in fraud involving cryptocurrency since 2021.
A Consumer Protection Data Spotlight data report published by the FTC showed that since the start of 2021, more than 46,000 people have reported losing over $1 billion in crypto to scams. This is approximately one out of every four dollars reported lost, more than any other payment method.
The median reported loss was $2,600.
According to the FTC, people ages 20 to 49 were more than three times as likely to be targeted in a cryptocurrency scam. People in their 30’s were hit the hardest, as 35 percent of their reported fraud losses.
The report found median individual reported losses increased with age, topping out at $11,708 for people in their 70s.
Nearly half of victims who reported losing crypto to a scam said it began on social media. The top platforms identified in the report were Instagram, Facebook, Whatsapp, and Telegram with an ad or messages.
Investment scams are most common since 2021, with $575 million of all crypto fraud losses reported to the FTC. These scams often falsely promise potential investors that they can earn huge returns by investing in their cryptocurrency schemes, but people report losing all the money they “invest.”
Romance scams claimed the second-largest losses reported by consumers, with $185 million in reported cryptocurrency losses. These scams involve love interests that attempt to entice someone into what turns out to be a cryptocurrency scam.
The median individual reported the crypto loss to romance scammers is $10,000.
Reports show that business and Impersonation scams are next with $133 million in reported crypto losses since 2021. These scams can start with a text about a supposedly unauthorized Amazon purchase, or an alarming online pop-up made to look like a security alert from Microsoft, the FTC reported.
“These scammers tell people the only way to protect their money is to put it in crypto: people report that these “agents” direct them to take out cash and feed it into a crypto ATM. The “agent” then sends a QR code and says to hold it up to the ATM camera. But that QR code is embedded with the scammer’s wallet address. Once the machine scans it, their cash is gone,” the FTC reported.
About 70 percent of people reported paying scammers with Bitcoin, 10 percent used Tether, and 9 percent used Ether. According to the report, crypto has several features that are attractive to scammers, such as its unregulated nature, irreversible transfers, and the fact that most people are still unfamiliar with how crypto works.
The FTC said these factors may explain why losses in 2021 were nearly sixty times what they were in 2018.
To learn more about cryptocurrency scams – and how to spot and avoid scams generally, visit ftc.gov/cryptocurrency and ftc.gov/scams. Report scams to the FTC at ReportFraud.ftc.gov.
