FTC Reports Over 46,000 People Lost More Than $1 Billion in Cryptocurrency Scams Since 2021

More than 46,000 people reported losing over $1 billion (roughly Rs. 7,770) in cryptocurrency scams since the start of 2021, the Federal Trade Commission (FTC) said in a report on Friday.

Nearly half the people who reported losing digital currencies in a scam said it started with an ad, post or a message on a social media platform, according to the FTC.

The craze for cryptocurrencies was at a fever pitch last year with Bitcoin hitting a record high of $69,000 (roughly Rs. 53.6 lakh) in November. (Bitcoin price in India at 11:12am on June 4 was Rs. 24,38,152)

Reports point to social media and crypto as a combustible combination for fraud, the agency said, adding that about $575 million (roughly Rs. 4,467 crore) of all losses related to digital currency frauds were about “bogus investment opportunities”.

Nearly four out of every ten dollars lost in a fraud originating on social media was lost in crypto, far more than any other payment method, with Instagram, Facebook, WhatsApp and Telegram being the top social media platforms in such cases, according to the report.

The average reported loss for an individual was $2,600 (roughly Rs. 2,02,000) and bitcoin, tether and ether were the top cryptocurrencies that people used to pay scammers, the FTC said.

In May, Dogecoin co-founder Billy Markus labelled 95 percent of cryptocurrency projects “scams and garbage” in a tweet urging his followers to change the general opinion people have about the crypto industry. Markus’ tweet states that cryptocurrencies have earned quite a bad reputation since their inception, with many people, especially traditional financial players, using derogatory terms to describe the asset class. Tesla CEO Elon Musk, in response, let out a “rolling on the floor laughing” emoji to Markus’ tweet which the latter lauded as being particularly brilliant.

Adding to his original tweet, Markus said that the people who are going to be “triggered” and “lash out” at his tweet are “scammers.” The tweet, as expected, sparked a heated debate among members of the crypto community on Twitter.

© Thomson Reuters 2022