PointPay and their experts state: Cryptocurrency scams had a record-breaking year in 2021. The most recent report found crypto scammers took about $15 billion worth of crypto, which is about twice more than was stolen in 2020. With such a boom in crypto industry interest, there’s no wonder fraudsters are coming up with more ways and opportunities to steal crypto.
As crypto scams are now the top threat to traders and investors, PointPay experts are doing their best to ensure that users can feel secure when buying cryptocurrencies on their next-generation trading platform.
Today, let’s talk about why crypto scams are skyrocketing and driving an online crime boom and why traders should be even more cautious in 2022.
Crypto is trending and striking in 2022
Crypto enthusiasts, influencers, and media personalities tend to advertise and promote speculative investment, making those who are ‘not in’ feel like fools. Elon Musk, Vitalik Buterin, Michael Saylor, and others have shown that it is possible to invest in cryptocurrency and become millionaires.
Scammers know how to use this rapidly growing popularity of cryptocurrencies. They have excellent command over social media platforms and know that novice traders usually suffer from ‘FOMO,’ or the fear of missing out. We can add all these factors together and get a tenfold increase in reported crypto scam claims over the last year. In 2021, users reported losing about $80 million to crypto scams. The Federal Trade Commission (FTC) said they received more than 7000 cryptocurrency scam reposts in the last quarter of 2020 and the first quarter of 2021.
Anonymity leads to scam
Cryptocurrency’s anonymity is the major point of contention. Many experts and analysts believe that cryptocurrency’s anonymous and untraceable nature is to blame for the high rate of cryptocurrency scams. Even though now we all know that Bitcoin and other cryptocurrencies can’t be called entirely anonymous, early crypto users and even fraudsters bought into this misunderstanding.
However, everything is more complicated here. While we all might be tempted to think that open-source and anonymous cryptocurrencies are safer, it is difficult to trace scammers due to the decentralized and regulation-free operations of the cryptocurrency system.
Complex technology
Whether anything about cryptocurrency technology or computer code affects the ability of scammers to mislead traders and investors is a moot point. We now know that technology no longer makes it easier for fraudsters to get away with stolen crypto, and it also doesn’t facilitate the cryptocurrency scams themselves.
PointPay experts believe that in most cases, a crypto scam is perpetrated by convincing the victims to entrust the scammer with their funds. On the other hand, the complexity of the entire crypto industry can be an asset for scammers. After all, scammers often take advantage of inexperienced users who do not know anything about this exciting technology. That is why PointPay experts ensure that staying up to date is imperative.
Crypto price hike
Unbelievable spikes in the price of Bitcoin and other cryptocurrencies in 2013, 2017, 2020, and 2021 attracted crypto scammers and fraudsters. It also created a pervasive sense of urgency that paved the way for risky, rash, impulsive decisions and made many investors and crypto enthusiasts overconfident.
Crypto scams and the lack of clarity
Widespread confusion about cryptocurrencies’ legal and regulatory status from 2009 to 2013 significantly contributed to the spread of crypto scams. Many scammers sincerely believed that theft was not an actual crime since the government did not officially recognize the cryptocurrency. In addition, it was widely believed that law enforcement was not in a position to find and arrest scammers who committed crimes related to digital currencies. However, after several high-profile court cases related to cryptocurrency, these views have changed.
Even though cryptocurrency-based crimes continue hitting new all-time highs, it is still possible to safely trade crypto in 2022. Follow PointPay on social media, and don’t forget to check its Blog and Media blog for more tips.
Enjoy crypto trading on PointPay and stay safe!
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