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The scamming saga in the cryptocurrency market seems to find no proper escape or a solution, at least as of now. While the extreme sensitivity of cryptos itself wasn't enough to keep investors on the edge, the fear of coming across fraudsters and losing hard-earned money has been a problem. A new analysis shows that investors lost more than $1 billion in cryptocurrencies to frauds from January 2021 to March 2022.
The new analysis by Federal Trade Commission states that fraud suggests cryptocurrency is quickly becoming the payment of choice for many scammers, with about one out of every four dollars reported lost to fraud paid in cryptocurrency.
As per the analysis, consumers reported losing over $1 billion to fraud involving cryptocurrencies from January 2021 through March 2022.
The FTC findings showed that most of the cryptocurrency losses reported by consumers were related to bogus cryptocurrency investment opportunities - losses to the tune of $575 million since January last year.
The bogus cryptocurrency investment opportunities often arise due to false promises made to potential investors. Scammers falsely promise investors that they earn huge returns by investing in their cryptocurrency schemes, however, people have reported losing all the money they “invest."
Apart from this, the next largest losses reported by consumers were on romance scams which often involved a love interest who tries to entice someone into investing in what turns out to be a cryptocurrency scam.
Further, consumers have lost significantly in Business and Government Impersonation Scams, under which the FTC report states that these scammers often target consumers by claiming their money is at risk because of fraud or a government investigation and the only way to protect their cash is by converting it to cryptocurrency.
According to FTC, cryptocurrency-related scams often begin on social media. Nearly half of consumers who reported a cryptocurrency-related scam since 2021 said it started with an ad, post, or message on a social media platform.
It added that consumers from 20 to 49 years of age group were more than three times as likely as older age groups to have reported losing money to a cryptocurrency scam. However, older age groups reported losing more money when they did report a cryptocurrency-related scam.
FTC guides consumers to watch out for below mentioned red flags:
- anyone who claims they can guarantee profits or big returns by investing in cryptocurrency;
- people who require you to buy or pay in cryptocurrency; and
- a love interest who wants to show you how to invest in cryptocurrency or to send them cryptocurrency.
