The Federal Trade Commission (FTC) revealed that at least 46,000 people lost crypto worth over $1 billion in different scams from the beginning of 2021 to June 2022. That figure only became higher in 2023. In 2024, crypto scams are alive and well – and getting more sophisticated.
When someone sends money in cryptocurrency, it's much harder for law enforcement to recover if it's a crypto scam. Money sent in Bitcoin or altcoins disperses very, very fast. Financial crimes detective Oscar Maldonado told CBS 2 that more and more of his cases involve victims who fall in love with someone and send them digital assets via cryptocurrency machines, like those people can find at gas stations. The money is there instantly, unlike a fiat transfer, which takes some time.
The transfers are made to crypto wallets in a spiderweb of transactions that are frequently too complex to trace. By the end of the day, the money might be in a dozen different wallets. Crypto scam cases are coming in by the hundreds each year in major cities. Chicago police reports have mentioned more than 6,000 such cases in the past decade.
Here are three ways crypto scams have become more complex in 2024.
1. AI-generated images
Romance scammers send their victims AI-generated images and videos in which they look very realistic. It takes an expert to identify these as fake. Signs include "telling eyebrows" and where the mouth movements might not sync with the audio. Some of this crypto scam content is low-level, but the fact is that technology is improving, and photos and videos are getting more and more realistic.
It's very easy for malicious actors to access AI software and perpetrate a crypto scam because most of it is free.
In some crypto scam cases, criminals might use a real picture, only it isn't of them. For example, romance book cover model Kevin Davis's photo was used in a lot of crypto scams. He told CBS 2 that his photos are publicly available and he has no control over who uses them. He edited his Instagram account to include the description "the one and only" in an effort to deter unauthorized and criminal use of his photos.
2. Increasing use of social media
Criminals have always used social media to perpetrate crypto scams, but their methods are changing in 2024. A 58-year-old man lost Ethereum worth $240,000 after being advised to invest in a business. According to a police report, the victim said he met the offender on Facebook.
More than 2,300 crypto scam cases have mentioned Facebook since 2013, and around 500 mentioned Instagram.If a stranger on Facebook contacts you, you should be very suspicious. Do not click on a link from an unexpected message on social media, even if it seems to come from someone familiar.
Users have been warned about email and calls, but many continue to labor under the misconception that social media platforms have become very good at weeding out profiles of bad actors, which isn't the case. The crypto scam artist might have a realistic profile or even be a friend of a friend, but that doesn't make him any safer to communicate with.
3. More sophisticated Bitcoin investment scams
Bitcoin hit an all-time high in 2024, and Bitcoin investment schemes are more common now than ever. The launch of almost a dozen Bitcoin spot ETFs contributed to this development in the world of crypto scams. Scammers contact investors claiming to be seasoned "Bitcoin investment managers," and many of them also claim to have made millions of dollars from crypto investments.
The promise of boundless wealth turns out to be too powerful a temptation for the victims of these crypto scams to resist. Usually, the process starts with the victim sending crypto to the seasoned investment manager's online account. Other times, the scammer asks them to download an app that will help them get rich, and they must do it as soon as possible.
In many crypto scam cases, the perpetrators have websites that seem legitimate because of the complex investing jargon used. Eventually, the victim tries to log into their account with the platform and withdraw their "profit," only to find they are blocked from doing so or only able to access it in exchange for a huge fee.
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