According to a new report issued by the Better Business Bureau (BBB), scams involving crypto are now the second most prominent and risky.
The BBB Publishes Crypto Scam Report
In the year 2020, crypto scams were still relatively thin. While they occurred on a regular basis, they only placed seventh on the BBB list. However, in 2020, crypto scams moved into second place, suggesting that they now occur much more often than anyone could have anticipated. While crypto scams themselves only make up about two percent of the world’s total scams, they wind up cheating people out of heavy funds.
On average, a person who falls victim to a crypto scam will wind up losing about $1,200. This is considerably higher than the median scam amount, which at the time of writing, is about $169 according to the report. Later in the month, the BBB will publish a follow-up report detailing certain facts with crypto scams alone. Some of the facts that will be discussed include specific tactics that scammers tend to utilize and what traders can do to keep themselves safe.
Melissa Lanning Trumpower – who produced the BBB report – explained in an interview:
Scammers shift their tactics constantly and appear to have expanded their use of cryptocurrency to perpetrate fraud. Cryptocurrency scams were riskier in 2021, with 66 percent of those targeted by this scam type losing money and a reported median dollar loss of $1,200. Scammers are using social media and other means to promise investment opportunities with great returns and low risks, which is a huge red flag. We received many reports of people being targeted on a variety of social media platforms after their friends’ accounts were hacked.
The good news is that crypto scams are not the number one danger traders need to watch out for. At press time, the primary spot is occupied by online purchasing scams, which account for more than 37 percent of the globe’s total scams. Approximately 75 percent of those who fall victim to these scams wind up losing heavy amounts of money.
Rug Pulls Are Quite Common
Trumpower continued her commentary with:
Time is money, and our survey results reflected this. We can’t ignore the fact that there are many other non-financial impacts of being targeted by a scam.
One of the most common scams to occur in the crypto industry as of late – according to blockchain analysis firms like Chainalysis – is what’s known as a “rug pull.” This is a scenario in which a person or group establishes a whole new cryptocurrency or token that investors can put their money into. They garner all the funds they need, and right when the token appears to be reaching a new price peak, the executives run off with all the cash, leaving investors with bruised egos and empty pockets.