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U.S. FTC warns of cryptocurrency investment fraud Young investors suffer five times more damage


Cryptocurrency fraud is on the rise

The US Federal Trade Commission (FTC) warned on the 17th that investment fraud related to crypto assets (virtual currency) is increasing rapidly. Many have released analysis reports that target young investors.

According to the FTC, reports of fraud have increased sharply since October 2020, and about 7,000 people have received damage reports totaling more than $ 80 million (about 8.7 billion yen). The median reported damage was about $ 1,900.

Compared to the same period of the previous year when the total damage was 7.5 million dollars (about 800 million yen), the number of reports has increased about 12 times and the amount of loss has increased about 10 times.

The target period coincides with the soaring market price of the virtual currency market, and it is also the period when investment platforms such as the investment application “Robin Hood” became widespread due to the corona wreck, attracting young investors.

Source: FTC

Survey results show that young investors in particular are more likely to be involved in investment fraud, with consumers between the ages of 20 and 49 being “more than five times more likely to lose assets in fraud than older generations.” was. “Consumers in their 20s and 30s have lost the most assets in investment fraud compared to other forms of fraud,” the FTC explained.

Typical fraudulent methods

The FTC has called on consumers to be vigilant, citing the following as typical fraudulent methods:

(1) Cryptocurrency investment / mining fraud site

The fraudulent site explains to users that “the more you invest, the greater the expected return,” and asks them to invest money, but points out that these promises of profits are false.

He explained that such sites tend to disguise their credibility by using fake user testimony and jargon. Also, in a clever example, when a user checks the site, it may appear that the investment amount is growing.

(2) Giveaway (free distribution) scam

In this method, if you send a virtual currency, it will be doubled and returned immediately, and the money will be sent to the fraudster’s address. It is said that it aims to attract customers by imitating the names of celebrities without permission.

In the last six months, he gave an example of statistics that more than $ 2 million of cryptocurrencies have been sent to impersonators Elon Musk.

Many give-away scams are carried out on social networks such as Twitter and Facebook, and in the past, in order to increase the credibility of the account, the criminal is a fake blue that indicates “verified as the person” on Twitter. In some cases, a check mark was added.

Relation: Case of deceiving Bitcoin by taking over Twitter, convicted of 3 years imprisonment for criminal

(3) Online dating scam

In this method, people are drawn into cryptocurrency investment scams using online matching apps and the like. It’s a way to talk to victims about cryptocurrency investment under the guise of a romantic relationship.

Although these scams are committed on various assets regardless of cryptocurrency, the FTC pointed out that since October 2020, about 20% of the damage related to dating scams has been transmitted in cryptocurrencies. ..

Regarding this method, the Financial Services Agency of Japan also focused on investment fraud through matching apps and dating sites in a recently released notice calling for caution against cryptocurrency investment fraud. It can be seen that the number of cryptocurrency-related frauds is increasing rapidly in each country as the cryptocurrency market soars.

Relation: Financial Services Agency calls attention to the latest cryptocurrency related troubles

In addition, the FTC added that fraudsters often impersonate government agencies and well-known companies, regardless of investment fraud. Examples include the Social Security Administration and frauds disguised as Coinbase, a major cryptocurrency exchange.


Author: A. Yamada
Reference: FTC

Images used under Shutterstock license
“Cryptocurrency” means “cryptographic assets”

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