Cryptocurrency has become a massive trend. You see advertisements for it during the Super Bowl and spot Bitcoin ATMs in convenience stores. It feels like everyone is talking about the amazing profits they make. However, this popularity has attracted criminals who want to steal your money.
The Federal Trade Commission reports that scams involving digital currency are happening much more often. Scammers use cryptocurrency because payments are hard to reverse and hard to track, making it the perfect tool for stealing funds from unsuspecting investors.
Why Criminals Prefer Cryptocurrency
The amount of money lost to these scams is growing fast. Since the start of 2021, more than 46,000 people reported losing over $1 billion in crypto to scammers. The median loss for each person is a staggering $2,600. The top currencies used to pay these criminals were Bitcoin, Tether, and Ether.
Scammers like crypto for very specific reasons. There is no bank or central authority to flag suspicious transactions. If someone steals money from your credit card, the bank can often stop it. With crypto, there is no one to call to stop fraud before it happens.
“Crypto transfers cannot be turned reversed. Once the money is gone, there is no getting it back.”
Most people are still new to how this technology works. They might know the names of the coins but do not understand the technical details. This lack of knowledge gives scammers an easy way to trick people. The losses reported in 2021 were nearly 60 times higher than they were in 2018.
Social media plays a huge role in these crimes. Nearly half of the people who reported a loss said it started with an ad, a post, or a message on platforms like Instagram, Facebook, WhatsApp, or Telegram. These platforms allow scammers to reach thousands of people instantly.
The Trap of Fake Investment Opportunities
Investment scams cause the most financial damage. Since 2021, people reported $575 million in losses to the FTC related to fake investment opportunities. This is far more than any other type of fraud. These scams work because they promise easy money to people who do not have much experience.
Investment scammers promise huge profits. They tell you that you can make a lot of money with zero risk. However, the money you send does not go into an investment account. It goes directly into the criminal’s personal wallet. They often create fake websites and apps to make it look real.
These fake sites show charts where your money appears to be growing. To gain your trust, some scammers even let you withdraw a small amount of money at first. This is a psychological trick. When you see that you can take money out, you feel safe investing much more.
The trap shuts tight when you try to cash out your big “profits.” The scammers will tell you that you need to send more crypto to pay for fake fees or taxes. Even if you pay these extra fees, you never get your money back.
- Scammers promise guaranteed returns.
- They use fake websites to show growth.
- They ask for fees to withdraw your own money.
Romance Scams With a Financial Twist
Romance scams are the second biggest cause of crypto losses. People reported losing $185 million to these cruel schemes. In these cases, the criminal builds a fake relationship with the victim online. They might act like a boyfriend or girlfriend and spend weeks or months gaining trust.
These scammers often dazzle victims with claims of wealth. They act sophisticated and successful. Eventually, they casually offer tips on how to start investing in crypto. They claim they want to help you build a future together. This lowers the victim’s guard because the advice comes from a “loved one.”
The financial damage in these cases is often very high. The median reported loss to romance scammers is $10,000. This is much higher than the average loss for other types of fraud. The mix of emotional manipulation and financial theft makes this scam particularly devastating.
According to data from the FTC, these scammers are experts at patience. They do not ask for money immediately. They wait until the emotional bond is strong before they suggest moving money into a specific crypto opportunity.
Learn more about how to spot romance scams from the FTC consumer advice page.
Impersonating Business and Government Officials
Another common tactic involves impersonation. These scams have taken $133 million from victims since 2021. It often starts with a text message about a fake Amazon purchase you did not make. Or, you might see a scary pop-up on your computer that looks like a security alert from Microsoft.
The scammers tell you that fraud is happening on your account and your money is at risk. To make the lie more believable, they might even patch a fake “bank representative” into the call. They create a sense of panic so you stop thinking clearly.
| Real Authority | Scammer Tactics |
|---|---|
| Will never ask for payment in crypto. | Demands payment in Bitcoin to “protect” funds. |
| Sends official mail or secure messages. | Uses pop-ups or random text messages. |
| Gives you time to think and verify. | Creates urgency and demands immediate action. |
A newer version of this scam involves criminals posing as border patrol agents. They tell people their accounts will be frozen due to a drug investigation. They claim the only way to protect your cash is to put it into crypto.
These fake agents direct victims to withdraw cash and go to a crypto ATM. They send a QR code to the victim and say to hold it up to the machine’s camera. That QR code is actually the scammer’s wallet address. Once the machine scans it, the cash is converted to crypto and sent instantly to the thief.
Who Is Most Likely to Get Scammed?
You might think only older people fall for these tricks, but the data shows something different. People in their 30s are actually the hardest hit group. About 35% of their reported fraud losses since 2021 were in cryptocurrency. Younger people are more likely to use crypto, which puts them at higher risk.
However, while younger people are scammed more often, older people tend to lose more money. The median reported loss increases with age. For people in their 70s, the median loss jumps to $11,708. This is likely because older individuals often have more life savings to lose.
It is crucial for everyone to stay alert regardless of age. Scammers adjust their stories to fit the target. They use tech support scams for older demographics and investment scams for younger demographics.
How to Protect Yourself and Your Money
The Federal Trade Commission has issued specific warnings to help you stay safe. The most important rule is that only scammers will guarantee profits. No genuine crypto investment is ever guaranteed to make money. The market is volatile, and real investors know there are risks.
You should also know that no legitimate business or government agency will require you to buy cryptocurrency. They will never ask you to use Bitcoin to solve a problem or protect your money. If someone on the phone tells you to go to a Bitcoin ATM, hang up immediately.
Never mix online dating with investment advice. If a new love interest wants to show you how to invest in crypto, or asks you to send them coins, it is a scam. It does not matter how rich or successful they seem to be. Cut off contact immediately.
Read the full data spotlight on crypto scams at the FTC website.
Conclusion
Cryptocurrency can be exciting, but it is also a minefield of fraud. By understanding these common tactics, you can keep your hard-earned money safe. Don’t let the fear of missing out drive you into a trap. Always pause and verify before you send any money. Share this article to help your friends and family stay safe from these predators.
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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry inherent risks. Always conduct your own research and consult with a certified financial advisor before making investment decisions.
