NATIONAL NEWS

$1 billion has been lost in cryptocurrency scams since 2021, FTC warns

Jun 4, 2022, 2:19 PM | Updated: Jun 25, 2022, 8:53 pm
Cryptocurrency scammers have stolen over $1 billion from 46,000 people since the start of 2021, a n...
Cryptocurrency scammers have stolen over $1 billion from 46,000 people since the start of 2021, a new Federal Trade Commission report says. (Credit: Sarah Silbiger/Bloomberg/Getty Images)
(Credit: Sarah Silbiger/Bloomberg/Getty Images)

WASHINGTON (CNN) — Cryptocurrency scammers have stolen over $1 billion from 46,000 people since the start of 2021, a new Federal Trade Commission report says.

The FTC rang the alarm bells on Friday, saying crypto-related crimes amount to about one out of every four dollars reported lost to fraud — more than any other payment method. The median individual reported loss was $2,600.

The vast majority of those who reported being bilked used Bitcoin to pay scammers, at 70%, followed by Tether and Ether. The victims typically are part of a younger age group — those aged 25-40 are three times as likely to lose money due to fraud.

Crypto scams are becoming increasingly popular, shooting up 60 times higher than in 2018. It has all the elements that give scammers an advantage — no bank to flag suspicious transactions, irreversible transfers and novice investors that are often largely unfamiliar with how crypto works.

The FTC’s warning comes at a volatile time in the crypto market. Since Bitcoin hit its peak of $69,000 in November, it’s lost more than half its value as investors have pulled out of riskier assets due to rising interest rates.

Nearly half of those who reported losing money to a crypto scam in 2021 said they were lured in through an online post or social media message. More than half of the posts were seen on Facebook or Instagram.

Fake investment opportunities were behind $575 million of all crypto losses reported to the FTC, far more than any other fraud type.

“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,” the FTC report said.

In February, a federal grand jury in San Diego indicted the founder of BitConnect for allegedly orchestrating a $2.4 billion global Ponzi scheme. The founder was accused of misleading investors about the cryptocurrency’s “lending program,” claiming the company’s proprietary technology would bring substantive returns to investors by tracking cryptocurrency exchange markets.

And in May, the CEO of Mining Capital Coin was indicted for “allegedly orchestrating a $62 million global investment fraud scheme” that promised sizable returns from mining new cryptocurrencies.

In both cases, scammers promised substantial returns to their investors, but instead pocketed the money into their own crypto wallets.

Last month, the SEC announced it was hiring more than a dozen new employees to combat cryptocurrency fraud.

The FTC said there are steps to take to avoid getting scammed. The first is to steer clear of anyone who promises guaranteed returns.

“No cryptocurrency investment is ever guaranteed to make money, let alone big money,” the FTC said. A legitimate investment also will never require you to buy cryptocurrency, the FTC said.

Romance scams also play a role in this kind of fraud — with a median individual reported crypto loss of $10,000. The FTC also warned not to 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, that’s a scam,” the FTC said.

The-CNN-Wire™ & © 2022 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.

KSL 5 TV Live

Top Stories

National News

A package of Plan B contraceptive is displayed at Jack's Pharmacy on April 5, 2013 in San Anselmo, ...
HALELUYA HADERO, ASSOCIATED PRESS

Amazon, Rite Aid cap purchase of emergency contraceptives

Amazon is limiting how many emergency contraceptives consumers can buy, joining other retailers who put in place similar caps following the Supreme Court decision overruling Roe v. Wade.
23 hours ago
Guns of many varieties are organized by type and caliber for use in training, and to fix malfunctio...
DON THOMPSON, Associated Press

Personal info on California gun owners wrongly made public

The California Department of Justice says it wrongly made public the personal information of hundreds of thousands of gun owners in their state-operated databases.
23 hours ago
The American Heart Association added sleep duration to its cardiovascular health checklist. It's a ...
Megan Marples, CNN

Sleep duration matters for heart health, according to new recommendations

If you needed another reason to get enough sleep, here it is: It may help your heart health.
23 hours ago
FILE: Former President Donald Trump speaks at a rally on September 25, 2021 in Perry, Georgia. Repu...
MICHAEL R. SISAK, Associated Press

Judge ends Trump contempt order after lengthy legal fight

A New York judge has ruled that former President Donald Trump is no longer in contempt of court.
23 hours ago
FILE (Getty Images)...
Associated Press

Police: Virginia toddler left in car dies, father kills self

A toddler accidentally left in a vehicle for hours died Tuesday and police said his father was found dead in an apparent suicide at their Virginia home.
23 hours ago
Cameron Diaz is making a new movie with Jamie Foxx. (Weiss Eubanks/NBCUniversal/Getty Images via CN...
Leah Asmelash, CNN

Cameron Diaz is coming out of retirement, thanks to Jamie Foxx

After an eight-year hiatus, Cameron Diaz is making movies again.
23 hours ago

Sponsored Articles

hand holding 3d rendering mobile connect with security camera for security solutions...
Les Olson

Wondering what security solutions are right for you? Find out more about how to protect your surroundings

Physical security helps everyone. Keep your employees, clients, and customers safe with security solutions that protect your workplace.
Many rattan pendant lights, hay hang from the ceiling.Traditional and simple lighting....
Lighting Design

The Best Ways to Style Rattan Pendant Lighting in Your Home

Rattan pendant lights create a rustic and breezy feel, and are an easy way to incorporate this hot trend into your home decor.
Earth day 2022...
1-800-GOT-JUNK?

How Are You Celebrating Earth Day 2022? | 4 Simple Ways to Celebrate Earth Day and Protect the Environment

Earth Day is a great time to reflect on how we can be more environmentally conscious. Here are some tips for celebrating Earth Day.
Get Money Online...

More Ways to Get Money Online Right Now in Your Spare Time

Here are 4 easy ways that you can get more money online if you have some free time and want to make a little extra on the side.
Lighting trends 2022...

Lighting Trends 2022 | 5 Beautiful Home Lighting Trends You Can Expect to See this Year and Beyond

This is where you can see the latest lighting trends for 2022 straight from the Lightovation Show at the Dallas World Trade Center.
What Can't You Throw Away in the Trash...

What Can’t You Throw Away in the Trash? | 5 Things You Shouldn’t Throw in to Your Trash Can

What can't you throw away in the trash? Believe it or not, there are actually many items that shouldn't be thrown straight into the trash.
$1 billion has been lost in cryptocurrency scams since 2021, FTC warns