Scammers have been quick to take advantage of the current cryptocurrency price rally, with the Federal Trade Commission reporting a near 1000% spike in the amount of reported investor losses as crypto cons see a surge in activity.
The crypto summer that began in 2020 continues to mint new wealth as many digital assets record new All Time Highs (ATHs). Unfortunately though, scammers also happen to have been beneficiaries of the new found focus on the digital assets market.
According to the report dated May 17, the FTC’s Consumer Sentinel has seen an alarming increase in the number of reports received from victims of cryptocurrency related scams since October last year. More specifically, the number increased by twelve times -7000- since the year before that.
The Danger Zone
The digital assets arena has a very strong online presence, the same one that has kept the crypto market afloat through every down cycle. However, scammers are starting to zero in on the communal approach to investing as an exploitable weakness – targeting mostly new entrants.
“They [scammers] blend into the scene with claims that can seem plausible because cryptocurrency is unknown territory for many people. Online, people may appear to be friendly and willing to share their “tips.” But that can also be part of the ruse to get people to invest in their scheme.” As per FTC report
Perhaps more worrying is the rise of “giveaway scams” that impersonate celebrities and otherwise credible figures in the digital assets space as a way to lure unsuspecting victims. One of the most notorious of them being a scam that impersonates the “DOGE Father”, Elon Musk. Unfortunate victims are reported to have lost approximately $2 million to these particular imposters.
Playing it Safe
Apart from the infamous volatility of the digital assets markets, scams are also an issue that investors should always keep an eye out for. To stay safe here are a few things to stay on the lookout for.
- Focus on buying and/or selling the coins or tokens. The digital assets themselves are where the value is, even crypto miners work with the end goal of selling the crypto they have gained.
- All investment is risky business. Be very careful of promised returns.
- Anyone who wants shove crypto investing down your throat is most likely trying to rip you off
It may be a little while before the current “wild west” environment of crypto investing is fully tamed, in the meantime, staying vigilant is the best way to protect your digital stash from con artists.
