The popularity of bitcoin, dogecoin and ethereum continues to grow. At the same speed, the number of scams associated with these digital coins also grows. According to a report published by CBS News, this year alone, Americans have lost more than $80 million in cryptocurrencies. According to data from the Federal Trade Commission (FTC), the figure is 1,000% higher than in the fall of 2019.
The hardest hit, according to information made available in the report, were people aged between 20 and 39 years. “In short, the group represents about 44% of reported losses,” reveals the FTC report.
The FTC data, released this Monday, 05/17, is a compilation of about 7,000 investment reports made in the cryptography market. Reports started being sent to the agency at the end of last year. As the documents reveal, investors lost an average of $1,900.
The losses came amid a time when the cryptocurrency market is showing promise. “A number of market factors are tools in the hands of scammers,” said Emma Fletcher, program analyst at the FTC. “They blend into the scene, with information that seems plausible, after all, the cryptocurrency universe is still unknown territory for many people.”
In the latter, digital currencies have become the center of many communication vehicles that guide the financial market. Although considered a highly unstable form of investment by many experts, bitcoin hit a record price – nearly $50,000 – in February of this year and has attracted more and more adherents not only for its value but also because more companies are accepting it. cryptocurrency as a form of payment – Starbucks, Visa and Whole Foods are just a few of the top retailers that accept bitcoin; Tesla CEO Elon Musk earlier this year announced that his company was accepting bitcoin as payment for its electric cars.
Ethereum and dogecoin also hit record prices earlier this year – especially after celebrities like Snoop Dogg, Paris Hilton and Kanye West began investing in digital currencies. Due to this scenario, the number of ATMs around the world that offer access to cryptocurrencies has also grown.
Still, dramatic swings in value have kept many traditional investors away from the encryption market. Dogecoin, for example, fell 36% earlier this month after a speech by Musk during “Saturday Night Live.” “The cryptocurrency is promising, but invest with caution,” tweeted Musk after this speech the program has been trying to reverse the statement made on the talk show.
Scammers, according to the FTC, are finding creative ways to deceive people by promoting a series of fraudulent investments. One of the detected scams offers, for example, online investment “tips” that direct future investors to fraudulent websites. In another, scammers pose as celebrities to extort money from those who want to start investing. According to the CBS News article, scammers sometimes also pose as employees of a government agency or company associated with cryptocurrencies.
In order not to be harmed any further, investors must first of all learn to identify scams. The FTC, for example, urges caution with those who promise huge returns when presenting ways to invest in cryptocurrencies.