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Instagram and Facebook prove to be a goldmine for crypto scammers

Since the start of 2021, people have lost $1 billion in crypto to scams. The median individual reported loss reached a whopping $2,600.

From January 1, 2021, through March 31, 2022, more than 46,000 people fell victim to crypto scams, the Federal Trade Commission (FTC) said. The top three cryptocurrencies that victims used to pay scammers were Bitcoin (70%), Tether (10%), and Ether (9%).

According to the FTC, the reported losses in 2021 were nearly sixty times what they were in 2018, and here’s why:

“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.”

Many crypto frauds originate on social media, with Instagram (32%), Facebook (26%), WhatsApp (9%), and Telegram (7%) being the top four platforms criminals exploit.

The most common one is a crypto investment scam. Victims reported losing $575 million after being hooked on bogus investment opportunities.

“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,” the FTC explained.

  • Never mix online dating and investment advice
  • Only fraudsters will guarantee profits or big returns
  • Nobody legit will require you to buy cryptocurrency

When it comes to romance scams, victims reported losing $185 million to online Casanovas, who dazzle people with their supposed wealth and sophistication.

“Before long, they casually offer tips on getting started with crypto investing and help with making investments. People who take them up on the offer report that what they got was a tutorial on sending crypto to a scammer,” the FTC said.

The median reported crypto loss to romance scammers was $10,000.

During the review period, people lost $133 million to business and government impersonation scams that can start with a text about a supposedly unauthorized Amazon purchase or an alarming online pop-up made to look like a security alert from Microsoft.

“In another twist, scammers impersonating border patrol agents have reportedly told people their accounts will be frozen as part of a drug trafficking investigation. These scammers tell people the only way to protect their money is to put it in crypto: people report that these ‘agents’ direct them to take out cash and feed it into a crypto ATM. The ‘agent’ then sends a QR code and says to hold it up to the ATM camera. But that QR code is embedded with the scammer’s wallet address. Once the machine scans it, their cash is gone,” the FTC report reads.

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