As enthusiasm for cryptocurrency continues to surge globally it is direly important for intending cryptocurrency investors to be vigilant and on guard against fraudulent actors in the space. Let’s face it the cryptocurrency space is under-regulation and this has made it a haven for people who perpetuate malpractices.
The Federal Bureau of Investigation (FBI) released a report on Monday September 09 2024 saying that a staggering $5.6 billion was lost to Cryptocurrency scams in 2023 in America alone.
Parts of the report made available to 9am News Nigeria read “Dear Reader; As the use of cryptocurrency in the global financial system continues to grow, so too does its use by criminal actors. In 2023, the Federal Bureau of Investigation (FBI) Internet Crime Complaint Center (IC3) received more than 69,000 complaints from the public regarding financial fraud involving the use of cryptocurrencies, such as bitcoin, ether, or tether.
Estimated losses with a nexus to cryptocurrency totaled more than $5.6 billion. While the number of cryptocurrency-related complaints represents only about 10 percent of the total financial fraud complaints, the losses associated with these complaints account for almost 50 percent of the total losses. Complaints filed in 2023 show that criminal actors exploit cryptocurrencies in each scheme category tracked by IC3. The exploitation of cryptocurrency was most pervasive in investment scams, where losses accounted for almost 71 percent of all losses related to cryptocurrency. Call center frauds, including tech/customer support scams and government impersonation scams, accounted for about 10 percent of losses associated with cryptocurrency”.
The most affected group were victims aged 60 and above. This group composed mostly of retirees accounted for roughly 30% of the total loss. People 60 and above are less adept with modern trends in the cyberspace and hence are more susceptible to the gimmicks of cyber criminals.
Methods used by scammers
Most prevalent among the scam are the use of bulk advertisement of cryptocurrency investment opportunities luring unsuspecting people to purchase digital assets with a promise of mouthwatering profits when the asset appreciates. Other scammers mostly use friendship or romance to build trust with a victim before advertising to them a fraudulent cryptocurrency investment opportunity. Other scammers pose as ‘Recovery Agencies’ promising to help victims of scam recover their lost money and duping them in the process.
Ogasabi reports that authorities recently sentenced a top American bank executive to 24 years in jail for his role in a cryptocurrency scam. This led to the collapse of his bank. Stay vigilant!
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