Consumers Could Lose A Lot Due to Crypto Scams

In the first two months of 2018, $532 million was lost by consumers to cryptocurrency-related scams, an official for the Federal Trade Commission said Monday.

Andrew Smith, director of the trade watchdog’s Bureau of Consumer Protection, speaking during an occasion centered on cryptocurrency scams and fraud, provided the figure and stated that the figure could grow into the billions by the end of the year.

“Customers will suffer a loss of more than $3 billion by the end of 2018,” he told guests of the occasion, which was live-cast on Monday.

One major issue is a lack of care on the part of investors. This was a problem pointed out by Joe Rotunda, enforcement director for the Texas State Securities Board. And it is actually a particularly severe one set against the background of a massive surge – and subsequent drop – in the valuation of cryptocurrencies over the past six months.

Coin Center director of research Peter Van Valkenburgh stated that people get drawn into fraud – from exit scams to pump-and-dump schemes – just because they want to have a higher return on their investment.

“I believe nobody should ever purchase any more cryptocurrency, put anymore [into] cryptocurrency than what they are absolutely prepared to lose … if you are ready to take part at all,” Van Valkenburgh said, adding:

“That is a message that needs to be repeated and repeated.”

Rotunda said he feels that “government bodies need to be positive in any type of new market, particularly this type. We did not have the general public getting pitched diverse types of investments like this on the scale a year ago. This is something that exploded late last year.”