Since the beginning of 2021, the Federal Trade Commission says that more than 46,000 people have reported losing over $1 billion in crypto to scams. That’s about one out of every $4 reported lost, and more than any other payment method.
The median individual reported loss? A whopping $2,600, the FTC says. The top cryptocurrencies people said they used to pay scammers were Bitcoin (70%), Tether (10%) and Ether (9%).
Crypto has several features that are attractive to scammers, which may help to explain why the reported losses in 2021 were nearly 60 times what they were in 2018. 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.
The FTC advises of some things to know to steer clear of a crypto scams:
- Only scammers will guarantee profits or big returns. No cryptocurrency investment is ever guaranteed to make money, let alone big money.
- Nobody legitimate will require you to buy cryptocurrency — not to sort out a problem, not to protect your money.
- Never mix online dating and investment advice. If a new love interest wants to show you how to invest in crypto, or asks you to send them crypto, it is a scam.