Want to avoid crypto scams? The FTC says do these three things

by Arthur · March 10, 2023

Published: March 10, 2023 at 1:59 PM ET

Cryptocurrency scams continue to cost people money.

Crypto scammers took $1 billion from Americans from January 2021 to March 2022. The median loss for one of these scams was $2,600, according to the Federal Trade Commission, and the FTC is now advising people to avoid getting involved in crypto investments with their local community. .

Here…

Cryptocurrency scams continue to cost people money.

Here are the three ways the FTC says Americans can spot crypto scams:

Don’t believe promises that you will make money, get a big payout or earn guaranteed returns. There are signs of fraud. No one can guarantee crypto investment wealth.
Ask online group moderators to remove crypto pushers. Or, if you’re a group moderator, remove anyone offering advice or “help” with crypto investments to prevent scams.
Do your research before you invest. Scammers take advantage of what people don’t know about crypto. It pays to search online for the company or currency name with the words “review”, “fraud” or “complaint”. Find out how it works and where your money goes. If you need help making investment decisions while avoiding fraud, visit Investor.gov.

“Once they start chatting with you, they’ll soon be asking you for money to invest in crypto, come up with a reason to send a payment in crypto, or both,” Cristina Miranda, consumer education specialist at FTC, wrote in a post. “But if you give it to them, the money or the crypto will be gone.”

MarketWatch has spoken to several crypto investors who ended up losing large sums since crypto prices started rising a few years ago.

See also: Dear Tax Man: My mom spent $90,000 on bitcoin and gifts because of a romance scam. Will the tax law provide any damage control?

Prices for crypto like bitcoin

BTCUSD

and ether

ETHUSD

has continued to fall since 2021, and is down about 70% from its 2021 highs. Bitcoin fell below $20,000 on Friday along with falls for the Dow Jones Industrial Average

DJIA

and the S&P 500 index.

SPX

“There have been nothing but negative headlines for bitcoin and crypto this week,” Yuya Hasegawa, an analyst at brokerage Oanda, told Barron’s. “There is little reason to buy Bitcoin now that the market is saturated with negative developments, not only specifically for the crypto industry, but also for the broader financial market as well.”

The total market capitalization of all crypto reached nearly $3 trillion in parts of 2021, but fell below $1 trillion in March.