The cryptocurrency market has been targeted in various attacks over the past year. A recent report by the Federal Trade Commission (FTC) said that over 46,000 individuals lost more than $1 billion worth of cryptocurrencies to scams since the beginning of 2021.
Crypto scams do target not only new users but also expert users. While there have been educative posts on how people can avoid being targeted by these scams, the numbers have kept rising over the past year.
Over $1B lost in crypto scams
A report released by FTC said that around $680 million in crypto fraud was reported in 2021. During the first quarter of 2022, another $329 million worth of crypto was also stolen. The report further said that there was a link between social media usage and the loss of cryptocurrencies through scams.
Your capital is at risk.
According to the FTC, social media usage while people held cryptocurrencies was a trigger for the loss of their digital assets. “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.”
The report also said that most people were not well-versed with the dynamics of the cryptocurrency sector. The lack of knowledge summed up the dynamics of what triggered scams across different industries.
The most stolen cryptocurrencies included Bitcoin, Tether, and Ether. Bitcoin stood at the top of the lost, accounting for 70% of the stolen tokens. Moreover, around 40% of the money lost to scams promoted on social media platforms was associated with cryptocurrencies. Crypto scams on Facebook came in at 32%, while Instagram accounted for 26%. 9% of the scams originated from WhatsApp.
Young people are targeted by scams
People aged between 20 and 49 years were more vulnerable to being scammed than people of higher age groups. Those of higher age groups lost more money because they were large-scale investors. The median amount of crypto lost to scams by the elderly was around $12,000.
The FTC further wrote that “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.”
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