US regulator finds the cause for $1 billion being lost to crypto scams

The Federal Trade Commission (FTC) has published a new report that concentrates on consumer losses throughout 2021.

The FTC took to its official Twitter account to write that it found that more than $1 billion was lost to cryptocurrency scams throughout 2021 and that cryptocurrency is fast becoming the go-to place for scammers. The commission's analysis found that one out of every four dollars reported lost via fraud was paid in cryptocurrency, with the FTC's latest Consumer Protection Data Spot indicating that majority of losses were in "cryptocurrency investment opportunities".

The commission explained that after cryptocurrency investment schemes, the second highest reported loss was "romance scams" that involved a love interest and then impersonations of a business or government official. The FTC found that nearly half of all consumers that reported a cryptocurrency-related scam said that the scam began on social media, and that individuals aged between 20 and 49 were "more than three times as likely as older age groups to have reported losing money to a cryptocurrency scam."

"Reports suggest that cryptocurrency-related scams often begin on social media. Nearly half of consumers who reported a cryptocurrency related scam since 2021 said it started with an ad, post or message on a social media platform," wrote the FTC.

Some of the red flags consumers should watch out for include:

anyone who claims they can guarantee profits or big returns by investing in cryptocurrency;

people who require you to buy or pay in cryptocurrency; and

a love interest who wants to show you how to invest in cryptocurrency or to send them cryptocurrency.