FTC to Consumers: Be Careful, Cryptocurrency Scams Are Booming

Be careful with your Bitcoin investments. The number of people who’ve fallen for cryptocurrency scams has been skyrocketing, according to the US Federal Trade Commission.  

On Monday, the FTC reported that consumers lost more than $80 million to cryptocurrency scams in the six-month period between October to March—right as Bitcoin’s value soared from $10,000 to over $57,000.  

“Compared to the same period a year earlier, that’s about 12 times the number of reports and nearly 1,000% more in reported losses,” the FTC wrote in a separate blog post. 

The data was pulled from consumer-filed reports to the commission and to US law enforcement. In total, the FTC received nearly 7,000 complaints about the cryptocurrency scams. 

“The median amount consumers reported losing to the scams was $1,900,” the FTC added. "Consumers age 20 to 49 were over five times more likely than older age groups to report losing money to these scams."

The fraud can take a variety of forms. One method involves the scammers promoting investment tips over chat apps and online forums, which then lead unsuspecting users to fake cryptocurrency websites. 

“Sites use fake testimonials and cryptocurrency jargon to appear credible, but promises of enormous, guaranteed returns are simply lies,” the FTC said. “These websites may even make it look like your investment is growing. But people report that, when they try to withdraw supposed profits, they are told to send even more crypto—and end up getting nothing back.” 

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Another tactic involves posing as celebrities to try and trick users into investing into cryptocurrency giveaway funds that promise to multiply the earnings. This has included creating fake internet accounts pretending to be Tesla CEO Elon Musk, a major cryptocurrency supporter. “For example, people have reported sending more than $2 million in cryptocurrency to Elon Musk impersonators over just the past six months,” the FTC added. 

The scammers are also targeting lonely singles on dating apps by floating cryptocurrency investment opportunities during online chats. “About 20% of the money people reported losing through romance scams since October 2020 was sent in cryptocurrency, and many of these reports were from people who said they thought they were investing,” the FTC said. 

To protect consumers, the FTC created a dedicated web page with details on how to avoid the scams. “Promises of guaranteed huge returns or claims that your cryptocurrency will be multiplied are always scams,” the commission added.