Cryptocurrency fraud is now the riskiest scam for consumers, according to BBB

Cryptocurrency and other investment scams are now the riskiest type of scam in the U.S., and cryptocurrency scammers frequently scam their victims out of thousands of dollars, the Better Business Bureau said.

Scammers have found creative ways to scam investors out of their money, the BBB said in its annual report. report about the biggest scams of 2023, which is based on 67,000 scam reports.

About 80% of Americans who were victims of cryptocurrency and investment scams last year lost money, the BBB reported. The average dollar amount lost was $3,800, "but many people lose much more than that" in crypto scams. saying Anna Werner, CBS News national consumer investigative correspondent.

Hackers use social media, gaming platforms, or text messages to contact people and brag about how well they are doing financially thanks to a cryptocurrency investment. After the victim responds, the conversation quickly turns into a question, Werner explained.

“This is where criminals pressure you to buy, trade, or store digital assets, such as cryptocurrencies, on fraudulent exchanges,” Werner said.

Cryptocurrency is an unregulated investment space that federal regulators and consumer advocates have long said makes it ripe for fraud. The popularity of cryptocurrencies skyrocketed during the pandemic as some investors became curious about the craze and invested funds in bitcoin, ethereum, solana and other tokens. Today, the industry has a market capitalization of $2.65 trillion, according to Forbes.

While cryptocurrencies have proven lucrative for many investors, they are not without risks. Companies that were once considered legitimate later imploded, like FTX, which was once one of the largest crypto exchanges in the world. FTX collapsed in 2022 amid an $8 billion funding shortfall and accusations that former CEO Sam Bankman-Fried had taken money from clients to prop up a struggling hedge fund.

Cryptocurrency investors too reported losing billions of dollars due to hacks or scams. A 70-year-old California woman filed a lawsuit this year against Chase Bank after lost $720,000 to a scammer in a crypto scam.

Rounding out the list of top financial risks in 2023, BBB named employment scams as the second riskiest scam. This is when a scammer contacts a victim and convinces her that she has been hired at a company and needs to fill out employee information.

In reality, the scammer is stealing someone's personal information. Victims lost an average of $1,995 in employment scams last year, the BBB said.

Online shopping scams were the third riskiest, according to the BBB. Victims often log on to a fake website to purchase an item, but the scammer does not deliver the product. BBB said victims lost an average of $71 in these types of scams last year.

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