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Watch For Scams Newsletter. Social Media Crypto Scams
September 13, 2022
Social Media Crypto Scams
Watch For Scams is dedicated to helping you avoid becoming a victim of fraud.
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Social Media Crypto ScamsNearly half of the consumers who reported a cryptocurrency-related scam in 2021 said it started with an ad, post or message on social media.
New analysis finds consumers reported losing more than $1 billion in cryptocurrency to scams since 2021. Most of the losses consumers reported were to bogus cryptocurrency investment scams.
The FTC found that Instagram (32%), Facebook (26%), WhatsApp (9%) and Telegram (7%) were the top platforms used for crypto scams.
Based on fraud reports to FTC’s Consumer Sentinel Network, the most common type of crypto scam was Investment Related Fraud, making up $575 million of the total $1-billion figure. These scams often falsely promise potential investors that they can earn huge returns by investing in their cryptocurrency schemes, but people report losing all the money they invest.
According to the FTC, common investment scams include cases in which a so-called “investment manager” contacts a consumer, promising to grow their money — but only if the consumer buys cryptocurrency and transfers it into their online account.
Other methods include impersonating a celebrity who can multiply any cryptocurrency that a consumer sends them or promises free cash or cryptocurrency.
The next largest crypto-scam-related losses came from Romance Scams at $185 million, in which a love interest tries to entice someone into investing in a crypto scam.
Business and Government Impersonation Scams came in third at a total of $133 million, in which scammers target consumers, claiming that their money is at risk due to fraud or a government investigation.
These scams can start with a text about a supposedly unauthorized Amazon purchase, or an alarming online pop-up made to look like a security alert from Microsoft. From there, people are reportedly told the fraud is extensive and their money is at risk. The scammers will then pretend to be a representative of the bank to secure the person’s crypto.
The report found that people aged 20–49 were most likely to lose crypto to a scammer, with those in their 30s the hardest hit, making up 35% of total reported fraud losses.
There are a number of ways to avoid cryptocurrency scams:
1. Only scammers demand payment in cryptocurrency. No legitimate business is going to demand you send cryptocurrency in advance — not to buy something and not to protect your money. That’s always a scam.
2. Only scammers will guarantee profits or big returns. Don’t trust people who promise you can quickly and easily make money in the crypto markets.
3. Never mix online dating and investment advice. If you meet someone on a dating site or app, and they want to show you how to invest in crypto or ask you to send them crypto, that’s a scam.
If you believe you have been a victim of this type of scam you should promptly report it to the IC3's website at www.IC3.gov. The IC3's complaint database links complaints together to refer them to the appropriate law enforcement agency for case consideration.
Remember - always watch for scams!
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