Crypto scams are spiking
From the New York Times: New data from the Federal Trade Commission shows a sharp rise in consumer reports of cryptocurrency scams. The spike suggests that scammers are taking advantage of the recent buzz around digital assets while also benefiting from the ignorance of some investors, with younger people seemingly most susceptible. “There seems to be a fundamental misunderstanding of cryptocurrency,” Emma Fletcher, an F.T.C. program analyst, told DealBook.
Nearly 7,000 people reported combined losses of more than $80 million in the six months to March. That’s about 12 times more people reporting frauds than in the same period last year and a nearly 1,000 percent increase in the amount of money lost to crypto scammers.
The frauds take various forms. Some start with a “tip” on an online forum, others on dating apps or with celebrity impersonators urging a crypto transfer. Many begin on social media. All raise the same red flag — buying cryptocurrency is an investment itself, yet the scammers ask people to transfer their digital assets in order to make more crypto.
People under 50 were five times as likely to be scammed than older investors.
Fear of missing out may be fueling investor credulity, said Christopher Leach, an F.T.C. attorney. “Crypto is hot and new,” he said. That is a boon to scammers, who use old tricks of the trade, like creating time pressure or promising guaranteed returns. “There are obviously some cryptocurrency opportunities that are legitimate,” Leach said, though he added that investors should still “think once, twice, three times” before transferring cryptocurrencies for reasons that may seem too good to be true.