The Federal Trade Commission (FTC) put out a new consumer protection data spotlight and there is some interesting data. According to data consumers have apparently lost $80 million to cryptocurrency scams since October last year and that doesn’t even make a year.
It is shocking to see that this is a tenfold year-over-year increase and includes only scams that were reported. Thus one can imagine that this number might be a lot higher than what is reported. The median amount of money scammed was $1900, which is a huge amount of money to people.
With the growing popularity of cryptocurrency, there is also an upward trend in scams related to cryptocurrency. There is an increase in their lucrative nature where they increase with a lot of different bull runs. It was significantly seen during the Initial Coin Offering boom in 2017. What has been striking in the crypto space is the types of scams that have originated. On the one hand, there are some incredibly sophisticated scams that take months-long endeavors of impersonating investors like multiple shell profiles. While on the other are these really run-of-the-mill kinds of scams are seen happening a lot of the time. These are more or less send me your money you’ll double your money and get it back.
Scams have taken over the crypto space like a parasite where some are quite obvious and others are more subtle and very convincing. There is a lot of different ways that this can happen and it can get complicated quite quickly. Some of the different types of scams include ponzi scams, giveaway scams, phishing scams, ICO exit scams, and wallet phishing. There is a plethora of articles and information online on what some of these scams are and it is good to understand them.
There have been numerous incidents reported of scams that have originated from a fake celebrity account. Many times Elon Musk’s fake account is used to lure people and investors into selling their Bitcoins. Very recently there was news that $2 million was sent to a fake Elon Musk accounts which just wild.
Scams become very pernicious during bear cycles and there is also a rise seen in other scammer accounts. There’s also a rise in a lot of paid trading groups that’s just a really efficient way of ripping someone out money monthly. Investors are seen as being swindles during bull markets so one must be very vigilant and careful where they’re putting money.
A survey suggested that it was people between the ages of 20 and 49 that fell for these crypto scams.
In order to avoid falling for such fraudulent schemes, crypto experts keep advising investors not to give their money for free. There is always a catch in anything that is free because we live in a world where even the air is not free.