The amount of money flowing into cryptocurrency scams continues to skyrocket.
The US Federal Trade Commission today said it estimates consumers lost over $1 billion to the scams between January 2021 and March 2022.
The estimate is based on fraud reports the FTC received from 46,000 victims. The numbers are a huge increase from the six-month period between October 2020 and March 2021, when the agency logged $80 million in cryptocurrency-related losses from 7,000 victims.
The fraud reports suggest “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,” the FTC wrote in a blog post.
Victims are also losing a sizable chunk of money. The median reported loss among the individuals was $2,600. “The top cryptocurrencies people said they used to pay scammers were Bitcoin (70%), Tether (10%), and Ether (9%),” the FTC added.
The increase in scams involving cryptocurrencies occurred as Bitcoin saw its value soar to a high of $64,000 in 2021. The FTC also notes cryptocurrency transfers usually can’t be reversed, giving fraudsters another reason to exploit the technology.
Most of the money, at $575 million, was lost to scams about bogus cryptocurrency investment opportunities designed to trick users into handing over their funds. Another $185 million was lost to romance scams, involving fake online dating profiles manipulating victims into investing in dubious cryptocurrency schemes. “The median individual reported crypto loss to romance scammers is an astounding $10,000,” the FTC added.
The news is an important reminder to be on the lookout for scams on the internet, particularly social media. “Nearly half the people who reported losing crypto to a scam since 2021 said it started with an ad, post, or message on a social media platform,” the US regulator added. “The top platforms identified in these reports were Instagram (32%), Facebook (26%), WhatsApp (9%), and Telegram (7%).”
To stay safe, it’s best to avoid investment opportunities or dating profiles that seem too good to be true. You can also check out our guide for more tips.