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US consumers reported losing more than $1bn to fraud involving cryptocurrencies from January 2021 through to March 2022, new analysis from the Federal Trade Commission (FTC) has found.
According to the latest FTC Consumer Protection Data Spotlight, since the start of 2021, more than 46,000 people have reported losing more than $1bn in crypto to scams. The report also claims this is 60 times higher compared with the amount lost to crypto scams in 2018.
These figures also suggest that about one out of every four dollars lost to fraud since 2021 involved digital currencies, which makes crypto the most preferred way for scammers to defraud people.
Among all cryptocurrencies, bitcoin was by far the most used coin by scammers. According to the FTC data, 70 percent of the cases involved bitcoin, while tether and ether were sought in 10 percent and 9 percent of the cases, respectively.
The median value of individual reported losses was $2,600.
The usual suspects
Nearly half of the victims of crypto-related scams said it started with an ad, post or message on a social media platform, according to the consumer protection agency.
A third of victims said scammers used Instagram to contact them, while a further quarter said they were approached via Facebook. Scammers also used WhatsApp and Telegram, albeit to a lesser extent, in 9 and 7 percent of the reported cases, respectively.
Earlier this year, the FTC flagged that social media scams have surged 18-fold during the last five years and around two-thirds of investment fraud cases were initiated via social media, where a payment method was specified, the incident involved cryptocurrency.
Data also shows that most of the money lost, $575m, involved investment scams, promising quick, easy and high returns for investors.
In addition, people reported losing $185m to romance scams, and a further $133m to impersonation scams. Impersonation scams typically involve the scammers pretending to represent the government, law enforcement or a local utility company.
This type of scam often involves other emerging payment methods, such as QR codes, the FTC warned.
Who are the victims?
People from all age groups ranging from 18 to above 80 reported losses to crypto scams to varying extent.
The data shows that people between 20 and 49 were more than three times as likely as older age groups to have reported losing money to a cryptocurrency scam.
However, when it comes to individual losses, people in their seventies paid the highest median amounts to scammers, at $11,708.
This is consistent with general trends flagged previously by the FTC, whereby older consumers may report a lower rate of fraud, but when they report them, they typically involve higher sums.
