US Federal Trade Commission Warns About Cryptocurrency Scams Using Social Media
The U.S. Federal Trade Commission (FTC) has warned about social media being used in cryptocurrency investment scams. “Social media is a tool for scammers in investment scams, particularly those involving bogus cryptocurrency investments — an area that has seen a massive surge in reports,” said the FTC.
Federal Trade Commission Warns of Crypto Scams Utilizing Social Media
The U.S. Federal Trade Commission (FTC) published a “Consumer Protection Data Spotlight” last week, warning the public about scams, including crypto investment scams, utilizing social media.
The FTC is an independent agency of the U.S. government whose principal mission is the enforcement of civil U.S. antitrust law and the promotion of consumer protection.
“More than 95,000 people reported about $770 million in losses to fraud initiated on social media platforms in 2021,” FTC’s program analyst Emma Fletcher wrote. “Those losses account for about 25% of all reported losses to fraud in 2021 and represent a stunning eighteenfold increase over 2017 reported losses.” She added:
Reports make clear that social media is a tool for scammers in investment scams, particularly those involving bogus cryptocurrency investments — an area that has seen a massive surge in reports.
“More than half of people who reported losses to investment scams in 2021 said the scam started on social media,” the FTC analyst continued. “Reports to the FTC show scammers use social media platforms to promote bogus investment opportunities, and even to connect with people directly as supposed friends to encourage them to invest. People send money, often cryptocurrency, on promises of huge returns, but end up empty handed.”
The FTC proceeded to give some advice on how to stay safe on social media. One is to limit who can see your posts and information on social media. The agency said that you can also opt out of targeted advertising. Another piece of advice is to check out the company you are about to buy from by searching online whether its name has been associated with a scam or a complaint.
In addition, “If you get a message from a friend about an opportunity or an urgent need for money, call them. Their account may have been hacked – especially if they ask you to pay by cryptocurrency, gift card, or wire transfer. That’s how scammers ask you to pay,” the FTC wrote.
Earlier this month, the FTC warned about cryptocurrency scams involving ATMs.
According to blockchain analytics firm Chainalysis, scammers raked in a record $14 billion in cryptocurrency in 2021, largely due to the rise of decentralized finance (defi) platforms. Losses from crypto-related crime rose 79% from a year earlier, driven by a spike in theft and scams, the firm said.