Cryptocurrency buzz drives record investment scam losses
Investing in cryptocurrency means taking on risks, but getting scammed shouldn’t be one of them. Reports to the FTC’s Consumer Sentinel1 suggest scammers are cashing in on the buzz around cryptocurrency and luring people into bogus investment opportunities in record numbers. Since October 2020, reports have skyrocketed, with nearly 7,000 people reporting losses of more than $80 million on these scams.2 Their reported median loss? $1,900. Compared to the same period a year earlier, that’s about twelve times the number of reports and nearly 1,000% more in reported losses.3
Some say there’s a Wild West vibe to the crypto culture, and an element of mystery too. Cryptocurrency enthusiasts congregate online to chat about their shared passion. And with bitcoin’s value soaring in recent months, new investors may be eager to get in on the action. All of this plays right into the hands of scammers. They blend into the scene with claims that can seem plausible because cryptocurrency is unknown territory for many people. Online, people may appear to be friendly and willing to share their “tips.” But that can also be part of the ruse to get people to invest in their scheme. In fact, some of these schemes are based on referral chains, and work by bringing in people who then recruit new “investors.”
Many people have reported being lured to websites that look like opportunities for investing in or mining cryptocurrencies, but are bogus. They often offer several investment tiers – the more you put in, the bigger the supposed return. Sites use fake testimonials and cryptocurrency jargon to appear credible, but promises of enormous, guaranteed returns are simply lies. These websites may even make it look like your investment is growing. But people report that, when they try to withdraw supposed profits, they are told to send even more crypto – and end up getting nothing back.
