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Consumers said they lost more than $1B to cryptocurrency-related fraud from January 2021 through March, suggesting crypto is “quickly becoming the payment of choice for many scammers,” according to a release by the Federal Trade Commission on Friday.
Most of the reported losses ($575M) involved bogus crypto investment scams, the FTC said, adding that one out of every four dollars lost to fraud was paid in crypto.
The next largest losses reported by consumers were on so-called “romance scams,” which involve a love interest who tries to tempt someone into investing in a hidden crypto scam, the government agency noted. Also, “business and government impersonation scams” targeted consumers by claiming their money is at risk because of fraud and the only way to protect their cash was converting to crypto.
And those aged 20 to 49 were more than three times as likely as older age groups to have reported losing money to a crypto scam, the FTC noted.
It’s no secret that fraud-related activities have been among some the biggest threats facing the crypto marketplace. Last year, Securities and Exchange Commission Chairman Gary Gensler warned the world that crypto is “rife with fraud, scams, and abuse.” Some government agencies, including the SEC, have taken steps to further oversee the evolving matter. Recently, the Department of Justice appointed its first director of the National Cryptocurrency Enforcement Team.
Previously, (May 28) Crypto.com and Coinbase violated the most advertising guidelines among rivals.