Rise of cryptocurrencies led to a massive surge in online scams
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Fake investments in cryptocurrency leads to a high surge in online scams.
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Investment-related scams on social media represented 37% of all reported losses
Fake crypto investments led to a surge in online scams in 2021, according to FTC data, Axios reported.
Cryptocurrency is considered an easy target for scammers because of the surge of its popularity, while there's still a lot of confusion as to how it works on a financial level.
As far as the numbers go, investment-related scams on social media were 37% of all reported losses, followed by romance scams and online shopping scams. Some people would send money, often in crypto form, with a promise of huge returns, but ended up empty-handed.
Even if an investment scam didn't occur on social media, more than half the people who reported losses said the scam began on social media.
Fraud cases from social media now constitute 25% of all fraud cases in the US, marking an 18-fold increase from 2017.
More than 95,000 people reported losing close to $770 million to fraud schemes on social media.
The FTC emphasized the role of Facebook and Instagram in social media fraud. Nearly 90% of people named one of the two social platforms as being where the scam originated.
The FTC also noted that cheap, targeted ads on social media make it easier for fraudsters to target victims using their interests or past purchases.
