Investing in cryptocurrencies means welcoming risks, but being scammed should not happen at all.
As the popularity and price of Bitcoin, Ethereum and Dogecoin continue to rise, so online fraud directly relates to these digital currencies.
Crypto traders lost more than 80 million dollars in October 2020. Investors between 20 and 39 years old were particularly affected, accounting for about 44% losses as per the FTC casualties report.
Data released on Monday by the FTC showed roughly 7,000 reports of cryptocurrency investment scams since last autumn, with an average loss of $1,900.
Emma Fletcher, a data analyst at the FTC, pointed out that blockchain is a crook’s game because cryptocurrency is uncharted ground for many investors.
These sudden losses come from rising Bitcoin prices, supported altcoins, and more. Still, investors are trying to figure out what allows these scams to occur in the blockchain.
Some say there is a ‘Wild-West’ vibe to blockchain culture and that it’s an unsolvable mystery.
Cryptocurrency enthusiasts gather online to discuss their mutual passion, and with bitcoin’s value has risen over the past few months, new investors may be impatient. All this plays into the influences of the crooks; they go into the prospect with assertions that seem plausible as cryptocurrency is uncharted territory for many people. People online can come across as friends and will share their so-called tips, and some programs are based on referral channels and attract recruiters.
Many people have reported being attracted to websites that resemble cryptocurrency investments or mining opportunities but are actually fake. They often offer multiple levels of investment – the more you invest, the higher the expected return. The sites use falsified testimonials and cryptocurrency jargon to sound credible, but the promises of huge, guaranteed returns are all lies. These websites can even give the impression that your investment is increasing.
Then there are the “giveaway scams,” purportedly sponsored by famous personalities or well-known celeb figures in the decentralized space, which promise to instantly multiply the cryptocurrency you send. However, people report that they later found out that they sent their currencies directly to a scammer’s wallet. As per records, people have sent more than 2 million dollars of digital currencies to scammers – and Elon Musk spoke about the risks in a tweet a few months ago.
Scammers are even using online dating to trick people into cryptocurrency investment scams. Many people said they believed they were in a long-distance relationship when their newfound love started discussing cryptocurrency opportunities, to which they subsequently responded. About 20% of the money lost to scammers has been under the guise of romance since October 2020.
Play it safe when it comes to cryptocurrencies; avoid promises of claims regarding extremely high returns on your investment. The cryptocurrency itself is the investment. You make money when you are lucky enough to sell it for more than you paid for it – don’t trust online users who say they know the best.