Social Media Platforms Were Biggest Playground for Crypto Scams in 2021: Report

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  • A recent FTC report reveals that most scammers launched crypto scams on social media platforms.
  • Moreover, the older the victim, the more money they risked losing in such schemes.

Nearly half of all crypto-related scams in 2021 can be traced to social sites, the US Federal Trade Commission (FTC) has revealed.

Released on Friday, the publication points out that crypto scammers earned over $1 billion in cryptocurrencies in 2021. The figure was a 5x increase and nearly 60x increase from scam reports in 2020 and 2018, respectively.

Worse still, this year’s statistics show that crypto scammers are far from subsiding. Fraudsters had taken in $329 million by the end of the first quarter of 2022. That’s nearly half of what they’ve earned throughout 2021 ($680 million), according to the FTC.

The leading social platforms in terms of crypto fraud were Instagram, Facebook, Whatsapp and Telegram with 32, 26, 9 and 7% respectively. This led the agency to conclude that crypto and social media are a “combustible combination for fraud.”

Note that Twitter is not present in the list above, although it is full of scams and spam bots. Eliminating these elements was at the top of Elon Musk’s agenda when he took over the microblogging platform.

Investment Related Crypto Scams

Additional information from the FTC report shows that investment fraud was the most prevalent, at $575 million. In such scams, an “investment manager” asks unwitting people to “invest” in crypto, promising attractive financial returns. The “investment”, however, consists of sending money to the attacker’s account, after which it vanishes into thin air.

For some fraudsters, making their case more convincing means posing as a celebrity. Similar traps involve fake investments in counterfeit art, gems and rare coins. Others call for people to “secure” slots at investment or consulting seminars using crypto.

Alongside crypto investment scams were romance scams, at $185 million. CNF covered several reports of such fraud here and here.

Third on the list were corporate and government imposters, draining a total of $133 million. Here, the authors impersonate companies, government agencies, or bankers trying to communicate a matter of financial urgency. The FTC has received reports of bogus Border Patrol agents telling people their accounts have been frozen as part of a drug trafficking investigation. To ‘protect’ their funds, users were advised to convert them into cryptocurrency and send them to an ATM (this turned out to be the scammer’s wallet address ).

Older age groups are more prone to crypto scams

The FTC also notes that septuagenarians lost more (up to $11,708) from crypto scams, compared to 18-19 year olds ($1,000). Those in their 30s reported the highest number of fraud cases at 35%.

As a recommendation, the FTC asks people to stay away from companies requiring payments in cryptocurrencies. They should also avoid investment schemes promising unreasonably huge returns. Last but not least, people should avoid mixing online dating and investment advice.

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