As Cryptocurrencies Get Popular, So Do Cryptocurrency Scams

For the past few years, cryptocurrencies have been in the news. At first, it seemed like it was going to take the world by storm and that everyone was jumping into this new digital currency. However, for some time now and in the middle of 2022, most of the news about cryptocurrencies has not been positive and upbeat. It’s been just the opposite, primarily due to reported cryptocurrency scams, a drop in investor trust, and a severe drop in value. A few crypto platforms have even gone belly up. Since 2021, more than 46,000 people have reported losing more than $1 billion in crypto to scams.  The spotlight is shining on cryptocurrencies for all the wrong reasons. If you haven’t noticed, cryptocurrency is going mainstream—or is trying desperately to do so—with high-profile actors like Matt Damon appearing on Super Bowl ads to a major sporting venue, the former Staples Center in Los Angeles taking on the name of a new cryptocurrency company. Those who are into cryptocurrencies have their reasons, but primarily it bypasses the traditional “establishment” system of banks, credit card companies and corporate payment processors. But there’s another component that has also been driving the popularity of crypto—the opportunity to strike it rich with crypto investments. Those two factors seem like good news. The bad news is this: scammers and cyberthieves have their own reasons for loving crypto currencies just as much: No wonder scammers are raking in so much money. According to statistics on the Federal Trade Commission website ( ftc.gov ) of those who reported losing crypto to a scammer, 50% reported the deception started by responding to an online ad, a social media post or a direct message on a social media platform. Crypto losses from social media were 40% of reported payment losses. A staggering amount. The platforms that accommodated the most fraud were Instagram, Facebook, Telegram and WhatsApp. More stats: Since 2021 (to approximately June 2022) nearly $600 million of crypto fraud losses reported to the FTC were linked to fake investment opportunities—fake cryptocurrency investments, which topped the list of crypto scams in terms of money lost in 2021. (And this is just what’s been reported.) What is the formula that is working so well at separating crypto owners from their not-so-hard-earned digital bucks? It’s a combination of the following: The reality of the opportunity is simply that cryptocurrency investments go directly to the scammer’s hands. Keep in mind that the scammers look 100% legitimate because this world of digital currency is all so new and still mysterious. Scammers know the allure it has and have learned schemes to attract their targets and keep them engaged. A fraudulent crypto website will look as legitimate as one that’s genuine and established, you’d hope. “It if looks real,” an eager investor might think, “it must be real.” It used to be that con artists who preyed on victims on online dating sites settled for cash or wire transfers, while they broke the hearts of victims. Now, they’ve advance to the next level and are looking to scam cryptocurrency from those lured into a romance scam. The FTC reports that since 2021, consumers lost $185 million in cryptocurrency-related losses, or about a third of reported dollars lost in romance scams. Evidently, there’s a new angle to the scam in the crypto world. Instead of the con artist making a plea for money to get out of a fake problem, these suitors impress their victims with their supposed knowledge of crypto success and investing strategies. So, they provide investing tips and offer to help their new friends make new or better investments with their crypto dollars. However, when a victim sends their digital currency to their helpful “friends,” it disappears forever…along with the relationship. A median loss could be about $10,000 in cryptocurrency. One common strategy scammers use is to prey on our fears of losing our savings to criminals. Scammers have found a way to modify that time-tested ruse and steal crypto dollars. Here’s what they’re doing. Of course, the scammer has simply helped the victim transfer the cryptocurrency into the scammer’s own crypto wallet. In another impersonator scam, con artists mimicking Amazon or Microsoft are able to create popup messages of the computer screens of some consumer. The message is a security alert, saying fraud has been detected on a shopper’s account and their money is at risk. The suggested remedy is to buy cryptocurrency to protect your money. It goes from there. These business and government type crypto scams have racked up $133 million in stolen dollars. Chris Parker, CEO of WhatisMyIPAdress.com, hosts the Easy Prey Podcast and has blog content on EasyPrey.com . He’s interviewed experts on a variety of topics to help listeners avoid scams and fraud and stay safer online and in the real world. You can see a list of his episodes by going to your favorite podcast app and searching for the Easy Prey Podcast. You can also click the link below. Listen in, learn and stay safe.