About 46,000 people have reported losing more than $1 billion to crypto scammers since the beginning of 2021, the US Federal Trade Commission (FTC) said in a report released on Friday.
The median individual loss was $2,600 and the most common cryptocurrency used to pay scammers was bitcoin at 70%, followed by tether and ether.
The reported losses were almost 60 times what they were in 2018, which may be attributable to some features of crypto, including the fact that there is no bank or central authority to flag suspicious transactions, crypto transactions can’t be reversed and most people remain unfamiliar with how crypto works.
Almost half of the scams began with some sort of post on a social media platform, according to the FTC report. Instagram at 32% and Facebook at 26% were the most common.
Most of the reported losses came from investment scams that offered big returns and took advantage of people’s limited understanding of crypto. About $575 million of the total reported losses went to bogus investment opportunities. A distant second were romance scams, at $185 million.
The report said that people aged 20 to 49 were three times as likely to report losing money to a crypto scammer as those in older age groups. Still, the median individual losses tended to increase with age, rising to $11,708 for people in their 70s.
Crypto scams have also increased since the FTC reported about $80 million in total losses for Q4 2020 and Q1 2021.