The Federal Trade Commission (FTC), an agency in the United States of America mandated to protect consumers against fraud, has warned crypto investors to be wary of crypto scams.
The FTC cautioned crypto investors in a report it published on Monday (May 17, 2021) where it revealed that there has been a rise in crypto-related scams since October 2020.
According to the data captured in the report by the US authorities, about 7,000 consumers between Q4 2020 and Q1 2021 reported cases of crypto scams with investors losing $80 million within the period.
FCT said it got 570 reports related to crypto scams, which totaled $7.5 million in losses. Comparing both periods, the number of reported cases increased 12-fold, while reported losses skyrocket almost 1000%.
The report by the FCT is in line with a recent Chainaysis report that revealed that around $81 million worth of crypto has been stolen in 2021.
People most vulnerable to crypto scam and scammers ploy
Surprisingly, FTC stated that individuals between the ages of 20 to 49 “were over five times more likely to report losing money on cryptocurrency investment scams than older age groups.”
“In contrast, people 50 and older were far less likely to report losing money on cryptocurrency investment scams. But when this group did lose money on these scams, their reported individual losses were higher, with a median reported loss of $3,250, the report stated.
The authority notes that these scammers majorly use giveaway offer to deceive their victims. According to the FTC, investors sent over $2 million worth of crypto to Elon Musk impersonators in the period of six months.
Part of their strategy also includes impersonating popular people and celebrities to get people to send their money. Back in July 2020, hackers managed to hack Twitter accounts belonging to several personalities and fooled people into sending their Bitcoin to be doubled.
Other clever tactics of scammers to be wary of
Other methods used by fraudsters include romance scams, where one person believed to be in a long-distance relationship, was lured into sending their crypto to a scammer. However, the most prevalent and unsuspecting way scammers dupe people is through crypto investment the FTC noted.
In the wake of rising crypto prices and adoption, scammers continue to evolve and change their trick to dupe victims. Here are top four scams investors need to be wary of in 2021.