Cryptocurrency scams continue to cost people money.
Crypto scammers siphoned $1 billion from Americans from January 2021 through March 2022. The median loss for one of those scams was $2,600, according to the Federal Trade Commission, and the FTC is now advising people to avoid getting involved in crypto investments with their local community.
Here are the three ways the FTC says Americans can spot crypto scams:
- Don’t believe promises that you’ll make money, get a big payout, or earn guaranteed returns. Those are signs of a scam. No one can guarantee crypto investment riches.
- Ask online group moderators to remove people pushing crypto. Or, if you’re a group moderator, remove anyone offering advice or “help” with crypto investing to prevent scams.
- Research before you invest. Scammers are exploiting what people don’t know about crypto. It pays to search online for the company or currency name with the words “review,” “scam,” or “complaint.” Find out how it works and where your money is going. If you need help making investment decisions while avoiding fraud, visit Investor.gov.
“Once they start chatting with you, before long, they’ll ask you for money to invest in crypto, make up a reason you need to send a payment in crypto, or both,” Cristina Miranda, consumer education specialist at the FTC, wrote in a post. “But if you give it to them, the money or crypto will be gone.”
MarketWatch has talked to several crypto investors who ended up losing large sums of money since crypto prices began to spike a few years ago.
See also: Dear Tax Guy: My mom spent $90K on bitcoin and gifts due to a romance scam. Will the tax code provide any damage control?
Prices for crypto like bitcoin
BTCUSD,
and ether
ETHUSD,
have continued to decline since 2021, and are down around 70% from 2021 highs. Bitcoin tumbled below $20,000 on Friday alongside drops for the Dow Jones Industrial Average
DJIA,
and the S&P 500 index.
SPX,
“There has been nothing but negative headlines for bitcoin and crypto this week,” Yuya Hasegawa, an analyst at broker Oanda, told Barron’s. “There is just little reason to buy Bitcoin now as the market is saturated with negative developments, not just specifically for the crypto industry, but also for the wider financial market as well.”
The total market cap for all crypto nearly hit $3 trillion during parts of 2021, but dropped below $1 trillion in March.