Don't Let a Friend Become a Victim of these Cryptocurrency Scams. Here is What You Need to Know to Not Get Slaughtered

Today we need to have an honest discussion about the largest
growing scam category. Once you finish learning about it in this
podcast, you will have to help spread the word to friends,
family, and people you know. Don’t let them become a victim.


Although cryptocurrency has yet to become a mainstream payment
method, reports to the Federal Trade Commission show it’s an
alarmingly common method for scammers to get peoples’
money. 


Since the start of 2021, more than 46,000 people have reported
losing over $1 billion in crypto to scams – that’s about one out
of every four dollars reported lost.  That’s more than any
other payment method. The median individual reported loss? A
whopping $2,600. Bitcoin was the most prevalent requested
cryptocurrency by scammers. Seven out of ten requests were for
Bitcoin, 10 percent were for Tether and 9% were Ether.


As big as those numbers are, they still don’t give us a complete
picture of the scam losses with crypto. The vast majority of
frauds are never reported so if we are just looking at reported
numbers, it is a small percentage of total losses.  


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. 


Losses continue to accelerate. In the first quarter of 2022,
crypto scam reported losses are almost $330 million. If it
continues at this rate 2022 should end with about $1.5 billion in
reported losses.


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.


During this period, nearly four out of every ten dollars reported
lost to a fraud originating on social media was lost in crypto,
far more than any other payment method. 


The top platforms identified in these reports were Instagram
(32%), Facebook (26%), WhatsApp (9%), and Telegram (7%).


Of the reported crypto fraud losses that began on social media,
most are investment scams.


Indeed, since 2021, $575 million of all crypto fraud losses
reported to the FTC were about bogus investment opportunities,
far more than any other fraud type. 


The stories people share about these scams describe a perfect
storm: false promises of easy money paired with people’s limited
crypto understanding and experience. 


Investment scammers claim they can quickly and easily get huge
returns for investors. But those crypto “investments” go straight
to a scammer’s wallet. People report that investment websites and
apps let them track the growth of their crypto, but it’s all
fake. Some people report making a small “test” withdrawal – just
enough to convince them it’s safe to go all in. 


When they really try to cash out, they’re told to send more
crypto for (fake) fees, and they don’t get any of their money
back.


Romance scams are a distant second to investment scams, with $185
million in reported cryptocurrency losses since 2021 – that’s
nearly one in every three dollars reported lost to a romance scam
during this period. 


And many have an investment twist too. These keyboard Casanovas
reportedly dazzle people with their supposed wealth and
sophistication. 


This strategy is called “pig slaughtering.”


If you'd like to leave a voice message for an upcoming podcast,
visit this link.