- The Better Business Bureau lists crypto as the second riskiest scam.
- The BBB only added crypto as a potential scam in 2018.
- The average amount lost is $3,000.
Cryptocurrency is the second riskiest scam around, according to the Better Business Bureau, a non-profit that provides information to Americans and Canadians about which businesses and charities can be trusted.
The BBB scam tracker only added crypto as an option in 2019. Now, it’s second only to employment scams in terms of risk, it announced in a new report.
According to the BBB, 32% of crypto scams involved the purchase of crypto; 23.4% involved digital assets as an investment opportunity; and a whopping 31% of crypto scams involved Chinese crypto exchange C2CX. Most forms of crypto scams were conducted via email.
Fake crypto exchanges can be a way of losing money. Image: Shutterstock.
Crypto scams were tied with romance scams for the highest average losses, at $3,000. By comparison, most scams resulted in the average loss of $160. The $3,000 figure is a sharp increase from 2018, when the average amount lost was $900.
But crypto scams were not the most popular form of scams. Just 273 people reported crypto scams to the BBB. By comparison, 9,050 people reported frauds relating to online purchases.
Though crypto scams weren’t as numerous as other scams, according to the BBB, 68.5% of victims lost money when exposed to them.
The BBB’s report includes a story from Jose, of Arizona. He’d received a private message on Instagram about crypto trading from a person named Elizabeth, who promised she’d handle the business side of things. All he had to do was send some Bitcoin.
“After about two months I asked to withdraw the funds, and was shown a bank site, which looked fake,” he said. “They told me I needed to pay $500 to the bank for a code to withdraw the $25,000 I had in my account. In total I lost about $1,200—I was so frustrated.”
He advises that people talk to friends before making any financial decisions. “It was my mistake to keep this to myself,” he added.
Crypto's dark side
The BBB only tracks scams in North America. But according to a November, 2019 report from the Director of Security at MyCrypto, Harry Denley, the highest victim rates for crypto scams can be found in Indonesia, Nigeria, the US, and Vietnam.
Denley had been tracking click-throughs from crypto-related scams since June 2018, and found that 14% of victims were in Nigeria; 11% in Indonesia; nine percent in the US, and eight percent in Vietnam.
It’s difficult to measure the true extent of crypto scams, but the old adage still applies: “Not your keys; not your Bitcoin.”