Crypto scams are now an international cybersecurity threat that cannot be ignored. Just over 2021, $1 billion have been lost to blockchain and wallet-related scams, affecting more than 46,000 individuals. These are statistics from reported scams, so it would be fair to assume that the actual number is much larger. Due to the untraceable nature of crypto payments, it is becoming a staple for scammers worldwide. Most ransomware-based threat actors demand payment in Monero. Cryptocurrencies are popular among criminals for the following reasons:
- No bank or other entity flags suspicious transactions before they occur.
- Transfers of cryptocurrency cannot be reversed. Once the money is transferred, it is gone forever.
- It is still difficult for most people to understand how cryptocurrency works, making them susceptible to a slick pitch.
More than half of the reported losses were due to bogus investment opportunities. In some cases, scammers had websites and apps that claimed to track the investor’s portfolio growth after investing in cryptocurrency. It was possible for investors to make a small “test” withdrawal. Like Bernie Madoff’s Ponzi scheme, the impressive returns turned out to be fake. In order to cash out, people had to send more cryptocurrency to cover fees and still didn’t get their money back.
Romance scams involve a new love interest convincing the victim to invest in cryptocurrency or send the crook cryptocurrency for some reason. In subsequent scams, victims were told their money was at risk due to fraud or an investigation, instructed to convert it to cryptocurrency, and ultimately tricked into letting the crooks steal it. Cryptocurrency scams are especially scary when they start with an email claiming spyware has been installed on your computer and embarrassing photos or videos have been recorded. Unless you pay a ransom in cryptocurrency, the crook threatens to send them to your contacts. He even provides a link to a website explaining how to buy and transmit cryptocurrency.
Those in their 30s are most vulnerable to cryptocurrency scams, with people ages 20-49 three times more likely to report losing money. People in their 70s lost the most money – almost $12,000. According to the FTC, social media and cryptocurrency are a “combustible combination.” Social media accounts for nearly half of the reports they received. According to the survey, 32 percent said Instagram, 28 percent said Facebook, 9 percent said WhatsApp, and 7 percent said Telegram. Scams of all kinds are flourishing on social media, according to a separate FTC report. Cryptocurrency and other scams are only guaranteed by scammers, according to the FTC and BBB. Cryptocurrency investments aren’t low-risk. A cryptocurrency investment worth thousands of dollars today might be worth only hundreds tomorrow due to its volatility. Cryptocurrencies are only used by scammers. Investing in cryptocurrency or sending cryptocurrency for some reason to a love interest you’ve met online is a scam. Any request for money from a love interest you’ve never met in person should be treated with caution.