FTC Said That Consumers Lost $1 Billion To Cryptocurrency Fraud In 2021

According to a recent report from the Federal Trade Commission (FTC), consumers in the United States have lost over $1 billion due to cryptocurrency-related fraud in the last year.

Consumers reported losing over $1 billion to cryptocurrency fraud between January 2021 and March 2022, according to the FTC’s monthly Consumer Protection Data Spotlight. According to the research, crypto has become the payment of choice for many criminal opportunists, with almost one out of every four dollars in these frauds being paid in the digital currency.

Consumers reported $575 million in cryptocurrency losses, the majority of which were due to fraudulent investment offerings. These scammers fraudulently promised enormous returns by investing in cryptocurrency schemes, but individuals who “invested” instead lost all of their money.

Consumers had fallen prey to various other common tales in addition to fraudulent investment schemes. The second most common fraud was romance scams, in which a potential love interest would encourage someone to engage in a cryptocurrency scheme that turned out to be a scam.

Consumers were also targeted by scammers imitating a business or government and suggesting that their money was at risk of fraud or investigation until it was changed into cryptocurrency, according to reports.

Many of these scams started on social media, with over half of individuals who reported a crypto-related scam since 2021 indicating it started with a social media ad, post, or message.

Consumers should be skeptical of claims of guaranteed profits or outsized returns on cryptocurrency investments, potential love interests asking for crypto payments, or any organization seeking payment in cryptocurrency, according to the FTC’s study.

The UK’s national reporting center for fraud and cybercrime received 7,118 reports of cryptocurrency-related fraud last year. According to the City of London Police, by the end of September, cryptocurrency-related crime had defrauded victims of £146 million ($200 million), 30% higher than in 2020.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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