Cryptocurrency scams and frauds

June 7, 2022 - 2 minutes read

The rise of cryptocurrencies also means the rise of cryptocurrency scams and frauds. Are you aware of what these may look like? Recently, the Federal Trade Commission (FTC) wrote about some of the leading trends and stats about cryptocurrency scams. Here is a breakdown.

The FTC says

The FTC states that since 2021 over 46,000 people have reported losing more than $1 billion in cryptocurrency scams and frauds. And it gets worse, they are reporting an individual median loss of $2600. The FTC also reports that around 40% of the successful scams originated from social media.

The FTC breaks this down further by highlighting that of the social media scams, most were related to investment scams, followed by romance scams at a distant second.

Cryptocurrency and your small business

Cryptocurrency is an exciting new form of currency. You can allow customers to make purchases using it or maybe your small business can invest in it and usually gain some pretty exciting returns.

It can be great news when you hear you can make 25% or 50% or more on your purchase of cryptocurrency in the first few months, if not more. It may seem fool proof and a no brainer of a decision. But is it real? What is the actual risk? Have you verified who and where your investment money is going?

What you can do

In the case of these current scams, it is important to identify reputable cryptocurrency exchanges, verify they are who they say they are, and continue to monitor any accounts you use for cryptocurrency. It is advisable to speak with a financial institution or professional you trust about diversifying into cryptocurrency. This is definitely an area where you need to do your due diligence and homework to ensure you are not falling for the scams.

For more on cybersecurity scams and frauds check out Small business, Big Threat!

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