By Claire Moraa
- A rise in fraudulent schemes related to cryptocurrency investments has resulted in a significant loss of $12.5B as of 2023
- For the third consecutive year, since 2020, there has been a steady increase in online scams
An online scam is no new phenomenon. However, with the surge in digital currency usage, the method of operation has evolved and is now targeting unsuspecting individuals. A crime report by the FBI reveals that online scams are on the rise with a 22% increase in 2024 and with over 880,000 new complaints. Even though scams have been there before, this new surge is because attacks continue to morph and become more sophisticated. Attackers are employing advanced techniques and strategies to evade detection and maximize their profits.
Why This Matters: In the $12.5 billion that was lost in online scams, more than a third were crypto-related. This loosely translates to a 38% increase from the previous year. While cryptocurrency is revolutionizing the financial landscape, it is not devoid of risks. Such a substantial figure highlights that there are problems in this landscape. Cryptocurrency investments are often paraded as a get-rich-quick scheme. And with the lack of comprehensive information on how these digital currencies operate, the casualties are bound to be many. Boomers are likely to fall for love-turned-investments scams but they are not the only ones.
The healthcare industry has been hard-hit with ransomware attacks targeting health insurance. But we can’t just assign blame to the victims. Governments too are failing their people. Compared to traditional financial systems, the cryptocurrency market is relatively less regulated. This lack of oversight creates opportunities for scammers to operate with impunity, as there are fewer safeguards in place to protect consumers from fraudulent schemes. In the event that the cybercriminals were to be apprehended, it would be harder to track them because cryptocurrency transactions are pseudonymous. While transactions are recorded on the blockchain, they are not directly tied to real-world identities. Linking these pseudonyms to real people with real addresses is almost impossible.
What’s Next: The money lost may not be recovered. At least not all of it but we can appreciate the Federal Trade Commission’s efforts to protect the public from more losses. Other nations are also cracking down crypto scammers and hopefully bring them to book. Once these key players do their part, it will be up to individuals to avoid falling prey to these scams and prioritize their financial security. It’s okay to have trust issues when it comes to your money.
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