Americans Lost $1.4b in Crypto Scams in 2023 - Here Are 5 Tips From an Expert To Keep Your Money Safe
  • New data from the Federal Trade Commission (FTC) highlights how Americans lost $1.4 billion in 2023 from scams involving cryptocurrency, with an average loss of $2,600 per victim.  
  • As cryptocurrencies have exploded in popularity over the last few years, maintaining your safety online has never been as essential as today. 
  • With the popularity of cryptocurrency, these tips will help you avoid losing money through scammers. 

According to the FTC’s 2023 report, Americans lost $1.4 billion in scams where the method of payment were cryptocurrencies- only $400 million less than that lost to traditional bank transfer and payments. Here is how you can keep safe.

Head of SEO and research at crypto onramp platform Gabriele Asaro shares some top tips to avoid falling prey to online scammers and keep your money safe when engaging with cryptocurrency platforms. It is important to note that cryptocurrencies are not backed or insured by the government, and they are not obliged to help if you lose money. 

1. Do not participate in pump and dump schemes

Pump and dump schemes manage to bait many as the crypto market is unregulated so it is wise to avoid these where possible. This type of fraudulent behavior is commonly set up on Discord, and many who are part of the group chats involved in pump-and-dump schemes are unaware that they are the victims. 

This type of scam works by artificially raising the price of a stock, or cryptocurrency, by increasing its popularity, at which point they tell you to invest in it before selling your investment off and gaining money from it.  

However, insiders will have bought this crypto before you were involved and sell it off to you during this initial ‘pump’ to make a profit. The scam then works as you are unable to make a profit after this initial surge in price as the value quickly crashes and you are told you were not fast enough selling your share. 

2. Never send money to someone you have not met in real life 

    Romance scams compiled more than $185 million in crypto losses from 2021 to 2022, and that figure has likely gone up in more recent years. Romance scams work when a con artist pretends to be someone else and creates a relationship to an individual, gaining their trust before gradually beginning to ask them for money to finance things like hospital bills, essential traveling or general bills that are fraudulent. 

    These predators ask vulnerable people for money, and so it is vital to remind yourself and loved ones to never send money to anyone you have not met in real life, even if you have heard their voice through a call or seen a picture of who they claim to be. Cryptocurrencies are non-refundable and you cannot stop a payment once it has gone through so it is vital you never send any money to a source you cannot verify is trustworthy.  

    3. Be mindful of investment scams 

      The Instaxchange expert says that whilst many believe they would recognize a romance scam, plenty of people will fall ill to investment scams without realizing the fraud behind it until it is too late.  

      Investment scams, the number one area where crypto users are losing their money – as of the latest figures, $575 million was lost between 2021 and 2022-, occur when a fraudulent individual contacts you with promises of high returns on money. 

      Scammers will contact you randomly, often through social media but it can be through email or phone, and tell you to invest on their site. They will lure you in with promises of quick returns but what they are really doing is getting you to ‘invest’ then withdrawing this money for themselves. Be mindful of these and do your research before you invest in any form of crypto. Those who promise fast money are always scammers.  

      4. Always check the source of who contacted you 

        Imposter scams lost US citizens over $752 million last year, with $133 million being crypto losses, therefore it is imperative to check the details of those contacting you regarding payments.  

        One way imposters will try to catch you is by pretending to be from a company or government body demanding you send them money, and they can be very convincing. The FTC, and any other government sector, will never harass you or demand money and neither will your company. If there is a link in an email to a site, you can double check if it is real by hovering your mouse over the URL – a fake URL will read as such when your mouse rests on the link.  

        In addition, many email providers will show the real email address in the ‘from’ field, which you can compare against any contact details on official sites. 

        5. Do not engage in blackmail scams  

          Most Americans are on some form of social media nowadays, meaning it is very easy to be targeted by fake individuals. Criminals will report to have information they can blackmail you with so you give in to their demands, but this is a serious offense and should be immediately reported to the police. 

          Usually, the scammers do not have damning evidence on you and rely on your fear to get your money. Do not engage and report this immediately to the platform they messaged you on.  

          Commenting on keeping yourself safe with crypto, expert and head of SEO and research of Gabriele Asaro said: 

          “Crypto can be a safe and secure currency. Millions of people are beginning to use and become knowledgeable about how it works, yet there will always be scammers looking to make money maliciously. 

          “It is unfortunate that many fall victim to scams and even more so that experienced users would dedicate time to taking advantage of those newer to crypto.  

          “However, it is easy enough to ensure you do not lose money by remembering to verify sources, check if a site is trustworthy and never send money to a person you have not met in real life.” 

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