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Wednesday April 17, 2024

Americans lose thousands of dollars to crypto scammers

Better Business Bureau (BBB) has sounded the alarm that 67,000 crypto scams have been reported

By Web Desk
March 10, 2024
This illustration photograph taken on July 19, 2021 in Istanbul shows a physical banknote and coin imitations of the Bitcoin cryptocurrency.— AFP
This illustration photograph taken on July 19, 2021 in Istanbul shows a physical banknote and coin imitations of the Bitcoin cryptocurrency.— AFP

All of us face cons every other day, especially in connection with our finances. However, the riskiest type of scams are those that take place in the world of cryptocurrency and investment, the Better Business Bureau (BBB) has sounded the alarm. 

The BBB highlighted the increasing number of crypto fraudsters preying on victims and making off with substantial sums of money, the CBS reported. In its annual report on the major scams of 2023, the BBB revealed startling statistics, drawing from 67,000 scams reported so far.

Around 80% of Americans, who were targeted in crypto and investment scams during the past year ended up losing their money, the BBB said. The average amount of money lost in such scams stands at $3,800. 

CBS News national consumer investigative correspondent Anna Werner shed light on the issue, saying, "Many people lose much more than that" in crypto scams.

Hackers start conversations with their potential target by utilising social media, video game platforms, or text messages. Once into a dialogue with their prey, they brag about their financial success resulting from crypto investments. As soon as the targeted person shows interest, the conversation takes a sharp turn, with scammers asking their target to do a certain act. 

They pressure individuals to engage in buying, trading, or storing digital assets, including cryptocurrency, on deceptive exchanges. "This is where the crooks pressure you to purchase, trade or store digital assets — such as cryptocurrency — on fraudulent exchanges," Werner said.

The unregulated nature of the crypto investment business has long alarmed federal regulators and consumer advocacy groups because it fosters an environment that is conducive to fraud. Even with its astounding $2.65 trillion market cap today, the cryptocurrency market is not risk-free, despite its surge in popularity throughout the epidemic.

Formerly reputable companies like FTX, once a major crypto exchange, collapsed in 2022 due to a billion shortfall in funds and allegations of misusing customer money.

Crypto frauds have consequences that go beyond just monetary losses. A 70-year-old woman from California recently sued Chase Bank after she lost $720,000 in a cryptocurrency scheme due to fraud.

Reflecting on the broader landscape of scams, the BBB identified employment scams as the second riskiest, involving scammers posing as employers and tricking victims into divulging personal information. 

Last year, victims lost a median of $1,995 to these deceptive practices. 

Online purchase scams rounded out the top three, with victims typically encountering phony websites and losing a median of $71 without receiving the promised products.