The United States Federal Trade Commission (FTC) has laid the blame for $1 billion being lost through crypto scams at the feet of social media platforms such as Instagram, Facebook, WhatsApp, and Telegram.
The report, published on Friday, found that the amount lost in 2021 was five times that of 2020, and six times up from 2018. The FTC described the social media and crypto relationship as “a combustible combination for fraud”. Investment-type fraud made up $575 million of the total $1 billion.
According to the report, as of March 31st, the amount of crypto scammed was already at half of the total amount of 2021. Between January and March of 2022, over 46,000 people reported being a victim of fraud through cryptocurrency, according to the FTC.
Scammers are reported to impersonate border patrol officers, businesses, government officials, and potential romantic interests.
The commission said, “The top cryptocurrencies people said they used to pay scammers were Bitcoin BTC (70 per cent), Tether USDT (10 per cent), and Ether ETH (9 per cent).”
“Crypto has several features that are attractive to scammers, which may help to explain why the reported losses in 2021 were nearly sixty times what they were in 2018. There’s no bank or other centralized authority to flag suspicious transactions and attempt to stop fraud before it happens.”
“Crypto transfers can’t be reversed – once the money’s gone, there’s no getting it back. And most people are still unfamiliar with how crypto works.”
“These considerations are not unique to crypto transactions, but they all play into the hands of scammers.”
“Reports point to social media and crypto as a combustible combination for fraud. 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.”
Currency, digital, and crypto entrepreneur, David Merino, added, “The FTC is right. There are tons of threats to your money out there and scammers are constantly preying on potential victims. We created a high-frequency trading algorithm for partly this exact reason. 30,000 people now use it because of its efficiency, sustainability and transparency.”
“We wanted to control the enormous risk in the foreign exchange market with a constantly benefiting and audited system that was safe for the investor and where the capital is always in control of the person.”
On the plight of victims and the future of cryptocurrency with seemingly rising scams he added:
“I spent 12 years in the military and I’ve struggled enormously financially. It’s sickening to me that people want to prey on the vulnerable through people having a lack of knowledge. Do not just transfer your crypto. You are in control of your account. Be very careful where you’re moving your money to and before you do think about why you are doing it.”
“Social media is ultimately a vehicle for communication these people are using. Increased and easy communication does have its cons in this sense. But ultimately, the benefits of crypto, blockchain, and web3 far outweigh the negatives. Fiat is scammed heavily all the time, we would never consider it as an ill means of finance, but we do have to sure up our systems so the vulnerable are more protected using crypto.”
“I now have thirteen businesses and have certainly increased my success, there are opportunities out there. But I can’t stress enough. Be careful.”
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.
The report stated, that people aged between 20 to 49 were most likely to have been a victim of a cryptocurrency scam.
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