Fraud experts say the trajectory is alarming, and will likely only get worse.
“When criminals latch onto a new way of stealing people’s money, others follow,” Kathy Stokes, director of fraud prevention at AARP, which has its own crypto scam-related resources, told Recode. “Combine this with the ‘legitimizing’ forces of pro-crypto ads and the move of 401(k) plan service providers to add this unregulated, highly speculative investment as an option for their plan participants, there’s no telling how many people will lose a lot of money — which they won’t likely get back.”
More than half of that $1 billion came from investment-related scams: people promising they can invest victims’ money into crypto for big returns. That type of scam isn’t new even if the type of currency used in it is, but the once-booming crypto market likely made it an easier sell to victims. It certainly helped that, until recently, people regularly reported making huge amounts of money as crypto prices exploded. Combine that with the fact that most people don’t know much about crypto in the first place and you have the perfect recipe for scams.