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Cryptocurrency scams are continuing to grow, FTC reports

The agency says around a quarter of all scammed money now comes from these schemes

Bitcoin or cryptocurrency scam concept with fraud alert
Photo (c) Kameleon007 - Getty Images
The Federal Trade Commission (FTC) says scammers have become so enthralled with the results of using cryptocurrency as a way to get people’s money that it now accounts for one in every four dollars lost. The agency recently found that the median amount that someone’s been tricked out of using Bitcoin, Tether, and Ether is $2,600.

For many, the world of cryptocurrency is probably an enigma. The reason many scammers are drawn to it is that there is no bank or centralized authority to flag a suspicious transaction and stop it from being completed. Unlike a credit card charge, cryptocurrency transfers can not be reversed. 

Many scammers are doubling down by piggybacking their ruse on social media. The FTC says nearly 50% of people who lost cryptocurrency to a scammer since 2021 were tricked by a simple post, ad, or message on a social media platform

Most of the losses that people reported from social media were investment scams. The agency said $575 million of cryptocurrency scam losses were about bogus investment opportunities since 2021. That's 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. Investment scammers claim they can quickly and easily get huge returns for investors. But those crypto 'investments' go straight to a scammer’s wallet,” the agency wrote in its report. 

“People report that investment websites and apps let them track the growth of their crypto, but it’s all fake. Some people report making a small ‘test’ withdrawal – just enough to convince them it’s safe to go all in. When they really try to cash out, they’re told to send more crypto for (fake) fees, and they don’t get any of their money back.”

Spotting cryptocurrency scams

What are the telltale signs of a cryptocurrency scam? Perhaps one of the most common is a message or pop-up that supposedly comes from a major company or government agency that claims there’s a problem or security breach on a person’s account. They might ask for personal information or suggest transferring money into a cryptocurrency account, but it's all a ruse that's meant to defraud the victim.

Here are some other things that the FTC says consumers should keep in mind:

  • Beware of offers that seem too good to be true. Know that only scammers guarantee big payouts or fast, easy money. These lies get you to “invest," but you won’t get any of your money back.

  • Don’t mix online dating and investment advice. If a new online love interest wants to show you how to invest in cryptocurrencies, it’s likely a scam.

  • Spot the scammers asking you to send cryptocurrency. Real companies and government agencies will never tell you to buy cryptocurrency to sort out a problem or protect your money.  

For help spotting cryptocurrency scams, the FTC suggests that consumers check out more of its findings and advice here.

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