More than 46,000 people say they have lost more than $ 1 billion in fraudulent cryptocurrencies since early 2021, according to a report released by the US Federal Trade Commission (FTC) on Friday, according to CNBC.
Losses last year were almost 60 times higher than in 2018, with an average individual loss of $ 2,600.
The FTC notes that the top cryptocurrencies these people said they used to pay fraudsters were bitcoin (70%), tether (10%) and ether (9%).
A key feature of cryptocurrencies such as bitcoin is that payment transfers are final and cannot be reversed. This is not always good. Billing returns – a kind of tool designed to protect consumers – allow consumers to reverse a transaction if they claim to have been cheated and charged for a good or service they did not receive.
Nearly half of those who reported losing cryptocurrencies by 2021 in fraud said the fraud started with a message on a social networking platform. The top platforms mentioned in these complaints were Instagram (32%), Facebook (26%), WhatsApp (9%) and Telegram (7%).
Fake investment opportunities were by far the most common type of fraud. In 2021, $ 575 million of the losses reported to the FTC were investment opportunities. People reported that investment sites and apps would allow them to track the growth of their cryptocurrency, but the apps were fake and when they tried to get their money they could not do so.
“There is no bank or other central authority that detects suspicious transactions and tries to stop the fraud before it takes place,” the FTC warns in its report.
Romantic fraud is the second most common source of cryptocurrency fraud, followed by corporate fraud, which, according to the FTC, often begins with fake messages allegedly coming from technology companies such as Amazon or Microsoft.
Younger consumers were more likely to fall victim to fraud. The FTC reports that people between the ages of 20 and 49 are more than three times more likely than older people to report losing cryptocurrencies to a fraudster.
To avoid fraud, the FTC says, people need to understand that investing in cryptocurrencies never has a guaranteed return, avoiding business deals that require buying cryptocurrencies, and heed the romantic suggestions that come with prompting cryptocurrencies.
Billionaire bitcoins Cameron and Tyler Winklevoss recently announced layoffs at the Gemini cryptocurrency exchange, citing the fact that the industry is in a “shrinking phase” known as the “cryptocurrency winter”, which has been “further deteriorating .
Source: Capital
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