- Digital scammers get more creative as the mass adoption of cryptocurrencies increases around the world.
- The Federal Trade Commission, FCT urges users to be more vigilant as Americans have lost over $80 million since October 2020.
- Advanced fee fraud, Investment scams, and Arbitrage Scams top the list of scams deployed by crypto con artists on users.
- The impact of crypto scams on the market is much worse than we had previously imagined.
Just like in any other sector, scammers were bound to peddle into cryptocurrencies especially as it fast became a global phenomenon.
Whether it’s from a direct hack of a legitimate wallet, or the typical con artist style of swindling the user to send them the cryptocurrencies directly, these con artists have swayed millions of cryptocurrencies users and are constantly devising new methods as users begin to learn their tricks.
As the ugly trend continues, Central Banks and government departments have advised their citizens on ways to avoid a scammers net. Social media has been a huge factor in these scams and some social media sites now restrict some crypto-related activities.
50 Shades: It Keeps Evolving
- The Advanced Fee Scam:
- The Crypto Doubling Scam:
- The Arbitrage Scam:
- The Rescue Team
- The Investment Scam
Federal Trade Commission Advises Users
The Federal Trade Commission is among the list of government departments that have warned users of potential cryptocurrency scams as cases keep rising.
Crypto scams have soared astronomically to a record 1000% since October resulting in the loss of over $80 million. According to the Federal Trade Commission, there have been over 7000 reported cases of crypto scams since last fall.
Emma Fletcher, an analyst with the FTC said,
"They blend into the scene with claims that can seem plausible because cryptocurrency is unknown territory for many people." The Commission keeps updating its website for potential scams to keep users ahead.
On the Flipside
- No matter the level of education and exposure, it seems that crypto scams are bound to happen because of new schemes being developed by scammers.
- Government Agencies and Social Media are slower in reality than they claim to be in blocking suspicious crypto activity.
Effects and the Way Forward
There is no way to sugar coat this, crypto scams have cost the industry a lot. The market capitalization of the market should have been a lot higher than it is today.
Frequent crypto scams make users scared to invest more funds in digital assets as they don’t want to lose their hard-earned money.
Governments have also used fraudulent activities relating to cryptocurrencies to ban exchanges and threaten to put more restrictions on crypto.
Going forward, government agencies and other relevant bodies should do more to educate users to keep them a step ahead of the scammers and social media sites should flag suspicious crypto activity on time as most scammers take advantage of social media to reach their victims.
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