- A recent report by the FTC reveals that most fraudsters ran crypto scams on social media platforms.
- Additionally, the older one the victim was, the more money they were likely to lose to such schemes.
Nearly half of all crypto-related scams in 2021 can be traced back to social sites, the US Federal Trade Commission (FTC) has revealed.
Released on Friday, the publication highlights that crypto scammers made away with over $1 billion in cryptocurrencies in 2021. The figure was a 5x and nearly 60x increase compared to scam reports in 2020 and 2018, respectively.
Even worse, this year’s statistics show that crypto scammers are far from subsiding. Fraudsters had cashed in $329 million by the end of Q1, 2022. This is nearly half what they made throughout 2021 ($680 million), according to the FTC.
Social platforms leading in terms of crypto fraud were Instagram, Facebook, Whatsapp, and Telegram at 32, 26, 9, and 7 percent respectively. This led the agency to conclude that crypto and social media are a “combustible combination for fraud.”
Note that Twitter is not present in the above list, despite being rife with scams and spam bots. Eliminating these items was on top of Elon Musk’s agenda during his takeover of the microblogging platform.
Investment-related crypto scams
Additional insight from the FTC’s report shows that investment-related fraud was the most rampant, at $575 million. In such scams, an “investment manager” asks unwitting persons to ‘invest’ in crypto, promising enticing financial returns. The “investment,” however, is sending money to the perpetrator’s account, after which they disappear into thin air.
For some fraudsters, making their case more convincing involves impersonating a celebrity. Similar entrapments involve fake investments in counterfeit art, gems, and rare coins. Others ask that people “secure” slots in investment or advice seminars using crypto.
Third on the list were business and government imposters, draining a combined $133 million. Here, perpetrators impersonate businesses, government agencies, or bankers trying to communicate a matter of financial urgency. The FTC got reports of fake border patrol agents telling people their accounts were frozen as part of a drug trafficking investigation. To “protect” their funds, users were advised to convert them to cryptocurrency and send it to an ATM (it turned out to be the scammer’s wallet address).
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Older groups more prone to crypto scams
The FTC also notes that people in their 70s lost more (up to $11,708) to crypto scams, compared to 18-19 year-olds ($1,000). Those in their 30s reported the most number of fraud cases at 35 percent.
As a recommendation, the FTC asks that people stay away from businesses demanding payment in cryptocurrencies. They should equally steer clear from investment schemes promising unreasonably huge returns. Last but not least, people should avoid mixing online dating and investment advice.