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BBB Says Crypto Fraud Is Riskiest Con Consumers Face

Crypto and investment frauds rank as the most perilous schemes in the United States presently, according to the Better Business Bureau (BBB). These fraudsters often deceive their victims, resulting in substantial financial losses, as revealed in the BBB’s annual report on the prevalent scams of 2023, compiled from approximately 67,000 reported incidents.

Last year, around 80% of U.S. citizens targeted by crypto fraud experienced monetary losses, with the median amount being $3,800. However, the losses incurred in crypto scams frequently exceed this figure significantly, according to CBS News’ Anna Werner, who specializes in consumer investigations.

Perpetrators of such scams utilize various platforms, including text messages, social media and gaming apps, to approach potential victims, boasting about financial success through crypto investments. Subsequently, once a victim replies, these perpetrators pivot the conversation toward convincing victims to engage in purchasing, trading or storing digital assets on fraudulent wallets and exchanges.

Cryptocurrency, being an unregulated investment domain, has long been flagged by consumer advocates and federal regulators as susceptible to fraudulent activities. The surge in its popularity during the pandemic, fueled by curiosity among investors, has led to substantial investments in cryptocurrencies such as Solana, Bitcoin and Ethereum. Presently, the industry boasts a market cap of $2.65 trillion, as reported by Forbes.

However, the allure of cryptocurrency investments comes with inherent risks. Instances abound where seemingly legitimate companies, such as FTX, once among the biggest cryptocurrency exchanges in the world, have collapsed dramatically. FTX’s downfall in 2022, marked by an $8 billion fund shortfall and allegations of misappropriating customer funds by former CEO and founder Sam Bankman-Fried, serves as a cautionary tale.

Furthermore, billions have been lost by cryptocurrency investors as a result of cyberattacks and fraud. One case in point is the lawsuit brought by a 70-year-old woman from California against Chase Bank, where she lost $720,000 as a result of falling for a cryptocurrency fraud.

The BBB’s report also identifies employment fraud as the second most prevalent financial risk in 2023. In these schemes, scammers deceive victims into believing they’ve secured employment and solicit personal information under the guise of completing onboarding formalities. The median loss in employment scams last year amounted to $1,995.

Additionally, the BBB ranks online purchase fraud as the third most dangerous. Usually, victims fall victim to bogus websites, where they try to buy things but receive get them. In these types of frauds, the average loss was $71.

Crypto companies across the board, including crypto mining entities such as Canaan Inc. (NASDAQ: CAN), are aware of this threat and are implementing measures to curb hackers and limit other wrong elements.

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