The main schemes for deceiving crypto investors over the past year

46,000 people does`t know how to trade cryptocurrency and reported losing more than $1 billion in cryptocurrencies due to social media scams in 2021, according to a US Federal Trade Commission (FTC) report. Since the vast majority of fraud in this area is not officially registered, these figures represent only a small part of the losses incurred.

The absence of a centralized authority that could stop suspicious transactions, the irrevocableness of crypto transfers, and the lack of knowledge of people in the field of cryptocurrencies allow fraudsters to increase their income and go unpunished in most cases.

In 2021, cryptocurrency fraud reports accounted for 24% of all reported financial fraud allegations. Among cases of financial fraud in social networks, the share of cryptocurrency transfers was 39% ($1.1 billion), in second place is payment by bank card – 20%. The average loss in cryptocurrency reached $2.6 thousand. In 70% of cases, people lost bitcoins, 10% fell on USDT and 9% on ETH.

Nearly half of the claims (49%) reported that the scammers acted through social media, posting ads or sending a private message. Most often, scammers used Instagram (32%), Facebook (26%), WhatsApp (9%) and Telegram (7%).

For comparison, in 2018 the share of such schemes was only 11%. According to the report, people between the ages of 20 and 49 are more than three times more likely than older age groups to report losing cryptocurrency. But, as a rule, the amount of losses increases with age, reaching $ 11 thousand for people aged 70 years.


The most popular online scams

Investment projects

$575 million of all reported losses from crypto fraud were related to fictitious investment proposals. False promises of easy money, combined with a lack of knowledge about cryptocurrencies, have led to the biggest losses.

The scammer claims that he can make huge profits for the investor quickly and easily. Despite the fact that it is widely reported that no platforms and brokers will ever guarantee profits, people continue to hope for a miracle. Such investments go directly to the scammer’s wallet. Victims of the attackers report that such investment projects or applications allowed them to track the growth of their assets, but all this turned out to be a scam. Some users claim that they can even make a small “test” withdrawal to make sure the service is safe. When a person tries to withdraw money in the future, he is offered to pay an additional commission for withdrawing funds, but neither the money nor the commission is returned back.

So, in January, the user lost 26 BTC ($1.1 million at the exchange rate at the time of the transaction), sending them to scammers who promised to double the investment.


Romantic acquaintance

Romantic scams are second only to investment scams. $185 million was lost in this way in 2021. It all starts in an ordinary romantic online dating. Some time after the start of communication, having gained trust, the scammer begins to casually give advice on investing in digital assets, offering his friendly help. A person who sympathizes with him in many cases agrees to a “profitable” offer. On average, the amount lost with this type of fraud was about $10,000.


“Official” scam

Attackers acting under the name of government agencies, banks and other companies stole $133 million in 2021. Such scams may start with a message about an allegedly unauthorized purchase from an online store or a pop-up window on a computer screen, much like a security alert from installed software. People are informed that their money is at risk. To maintain the legend, the hackers report supposedly official technical support numbers of the official structure.

In some cases, scammers posing as border guards informed people that their accounts would be frozen as part of a drug trafficking investigation. The only way to protect their money was to transfer it to cryptocurrencies through ATMs. Through a fake QR code, funds were sent to the scammer’s wallet.

In addition to fraudulent schemes on social networks, attackers hack official web pages and accounts of companies or celebrities and post phishing links to third-party sites there.

One type of scam is fake YouTube streams on behalf of celebrity entrepreneurs. Attackers use the images of Tesla CEO Elon Musk, Ripple CEO Brad Garlinghouse and Ethereum creator Vitalik Buterin. In total, crypto scammers stole a record $14 billion in 2021. Losses from crimes related to digital currencies increased by 79% compared to 2020.

To combat intruders, a group of large crypto companies – Binance.US, Circle, Solana Foundation, The Aave Companies and others, launched the Chainabu information platform.

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