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The roller-coaster ride for digital currency investors has been wild, and the recent plunge in prices has certainly left many with a big headache. But there's a larger, underlying problem that could have you reaching for the extra-strength aspirin. Some cryptocurrency investments are phonier than $3 bills. They are scams from the get-go. And investors who plunk down their hard-earned dollars in these shams can be left empty-handed.
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Losses grew more than 10-fold
Almost 6,800 consumers reported more than $80 million in cryptocurrency-investment scam losses during the six months ending March 31, the Federal Trade Commission (FTC) warned this week. The median loss was $1,900.
As for the $80 million-plus that went down the drain, that represents more than a 10-fold jump in losses from the same period a year earlier, when there were 570 complaints and $7.5 million in losses reported to the FTC.
Here are 10 things the consumer protection agency wants people to know if they don't want to lose their shirts to crypto scammers.
1. Some scammers impersonate Elon Musk, the billionaire entrepreneur whose tweets can stir the crypto market. The FTC received reports of more than $2 million in such losses due to Musk impersonators between October 2020 and the end of March 2021. A common scam “involves a promise that a celebrity associated with cryptocurrency will multiply any cryptocurrency you send to their wallet and send it back,” the FTC cautions.