Romance scams, also known as pig butchering, are the second largest monetary scam type to happen after investment scams. Instead, the funds are drained out of the wallet and never given back.
This alleged ‘once-in-a-lifetime’ opportunity incentivizes users to transfer funds quickly in the hope of an instant return. These scammers tend to promote giveaways that promise to double the users' crypto assets that they deposit into a designated wallet address. Unlike cash where you can not invest in it or stocks where you can not pay with it, crypto offers both of those insofar as consumers can pay and invest. Cryptocurrency is very attractive for scammers, as it can be both an investment and a payment medium. Investment scams often promise a user that they can make a lot of money at no risk. The most common type of crypto scams recorded by the FTC were investment-related frauds, which make up $575 million, or a little over 50%, of all the money lost to scams from the start of 2021 to March 2022. The FTC said “ the top cryptocurrencies used to pay scammers were Bitcoin (70%), Tether (10%), and Ether (9%).” Inexperienced crypto users are often targeted on social media platforms through the use of copycat websites, URLs, accounts, hacked verified accounts, fake projects, fake airdrops, malware, and plenty of other scams. The FTC’s report did not mention Twitter or Discord in their data despite being two of the biggest platforms where spam and scam bots promote fake crypto giveaways. More than 95,000 people reported about $770 million in losses to fraud initiated on social media platforms in 2021. The FTC reported that in 2022, 32% of the scams took place on Instagram, 26% on Facebook, 9% on WhatsApp, and 7% on Telegram. A large majority of these scams started on social media platforms such as Instagram, Facebook, WhatsApp, Discord, Twitter, and Telegram.
The United States Federal Trade Commission (FTC) released a report in June of 2022 highlighting that over $1 billion was lost to crypto scams since the beginning of 2021.
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