Social media and crypto a combustible combination for fraud: FTC report
© Moneycontrol Social media and crypto a combustible combination for fraud: FTC report
Social media and cryptocurrencies are a combustible combination for fraud, with almost half the people who reported losing $1 billion in digital currencies to scams since 2021 saying it started with an advertisement, post, or message on a platform like Instagram or Facebook, according to a report by the US Federal Trade Commission.
Since the start of 2021, more than 46,000 people reported losing over $1 billion in crypto to scams, about one out of every four dollars reported lost, the FTC said in its report. The losses reported in 2021 were almost 60 times what they were in 2018.
The top cryptocurrencies lost to scammers were Bitcoin (70 percent), Tether (10 percent), and Ether (9 percent).
According to the FTC, since the start of 2021, about four of every 10 dollars reported lost to a fraud originating on social media was through crypto, far more than any other payment method.
The top platforms identified in these reports were Instagram (32 percent), Facebook (26 percent), WhatsApp (9 percent), and Telegram (7 percent).
Of the reported crypto fraud losses that began on social media, most were investment scams. Since 2021, $575 million of all crypto fraud losses reported to the FTC were about bogus investment opportunities, far more than any other fraud type.
Romance scams
Romance scams were a distant second, with $185 million in reported cryptocurrency losses since 2021 – almost one in every three dollars reported lost.
Business and government impersonation scams came in third at a total of $133 million, with scammers targeting consumers, claiming their money is at risk due to fraud or government investigation.
According to the FTC, in some cases, scammers impersonated border patrol agents who told people their accounts would be frozen as part of a drug trafficking investigation. These scammers said the only way to protect their money was to put it in crypto: people reported that these “agents” directed them to take out cash and feed it into a crypto ATM.
People aged 20 to 49 were more than three times as likely as older age groups to have reported losing cryptocurrency to a scammer. People in their 30s were the hardest hit – 35 percent of their reported fraud losses since 2021 were in cryptocurrency.
However, the median individual reported loss tended to increase with age, topping out at $11,708 for people in their 70s.
The FTC detailed many ways to steer clear of crypto scams. Among the signs to look out for: Only scammers will guarantee profits or big returns. No cryptocurrency investment is ever guaranteed to make money, let alone big money. Nobody legit will require you to buy cryptocurrency to sort out a problem or to protect your money. That’s a scam.
Never mix online dating and investment advice. If a new love interest wants to show you how to invest in crypto or asks you to send them crypto, that’s a scam.
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