Cryptocurrencies such as Bitcoin, Ethereum, Solana and hundreds more are hot commodities in online trading, and it’s possible for an investor to make a profit. But many people have experienced dramatic losses, some through bogus investment platforms touted by scammers as sure moneymakers.
The Federal Trade Commission (FTC) warns consumers that “crypto investing comes with lots of risks, including scams.”
This virtual money isn’t backed by any government or central bank. Even so, you can use crypto to buy goods and services, exchange it for U.S. dollars and other conventional currencies on digital markets, and even obtain it at specialized ATMs.
But unlike the value of government-backed money, that of virtual currencies is driven entirely by supply and demand. This can create wild swings that produce big gains for investors — or big losses. And crypto investments are subject to far less regulatory protection than traditional financial products like stocks, bonds and mutual funds. Meanwhile, those crypto ATMs are favored by criminals for their anonymity and general lack of oversight.
Cryptocurrency fraud has taken a quantum leap in recent years. The FTC says that in 2022, more than 53,000 people reported losing a total of more than $1.4 billion in crypto to scams.