Cryptocurrency and other investment scams are now the most dangerous type of fraud in the United States, with crypto scammers frequently scamming victims out of thousands of dollars, the Better Business Bureau said.
The BBB said in its annual report on the biggest scams of 2023, based on 67,000 fraud reports, that scammers have found creative ways to scam investors out of money.
According to a report from the BBB, approximately 80% of Americans who were targeted by cryptocurrency or investment scams lost money last year. CBS News national consumer research correspondent Anna Werner said the median loss to crypto fraud is $3,800, but “many people have lost much more than that.”
Hackers use social media, video gaming platforms, or text messages to contact people and brag about how well they are doing financially because of their cryptocurrency investments. Once the targeted victim responds, the conversation quickly turns to questions, Werner explained.
“This is where scammers pressure you to buy, trade, and store digital assets, such as cryptocurrencies, on illicit exchanges,” Warner said.
Cryptocurrencies are an unregulated investment field, and federal regulators and consumer advocacy groups have long argued that they are ripe for fraud. Cryptocurrencies exploded in popularity during the pandemic as some investors took an interest in the trend and poured money into Bitcoin, Ethereum, Solana, and other tokens. According to Forbes magazine, the industry currently has a market capitalization of $2.65 trillion.
Although cryptocurrencies have proven lucrative for many investors, they are not without risks. Companies that were once considered legitimate later went bankrupt. FTX etc., was once one of the world's largest cryptocurrency exchanges. FTX faced an $8 billion cash shortfall in 2022 and allegations that former CEO Sam Bankman Fried took money from clients to prop up his struggling hedge fund. Business went bankrupt.
Cryptocurrency investors also Billions of dollars in losses were reported. Due to hacking or fraud. A 70-year-old California woman filed a lawsuit against Chase Bank earlier this year. Lost $720,000 to scammers in cryptocurrency scam.
The BBB rounds out its list of top financial risks for 2023, naming employment fraud as the second most dangerous scam. At this time, the scammer contacts the victim and convinces them that the person is employed by the company and needs to fill out employee information.
In reality, the scammer is stealing someone's personal information. According to the BBB, victims lost a median of $1,995 in employment fraud last year.
According to the BBB, online purchase fraud was the third most dangerous. Typically, the victim logs on to the fake girlfriend's website and purchases the product, but the scammer never delivers the product. According to the BBB, victims lost a median of $71 to these types of scams last year.
