Consumer Protection Data Spotlight | May 2021 1

Cryptocurrency buzz drives record investment scam losses

Investing in cryptocurrency means taking on risks, but

getting scammed shouldn’t be one of them. Reports to 

the FTC’s Consumer Sentinel1 suggest scammers are 

cashing in on the buzz around cryptocurrency and 

luring people into bogus investment opportunities in 

record numbers. Since October 2020, reports have 

skyrocketed, with nearly 7,000 people reporting losses

of more than $80 million on these scams. 2 Their 

reported median loss? $1,900. Compared to the same 

period a year earlier, that’s about twelve times the 

number of reports and nearly 1,000% more in reported 

losses.3

Some say there’s a Wild West vibe to the crypto 

culture, and an element of mystery too. 

Cryptocurrency enthusiasts congregate online to chat 

about their shared passion. And with bitcoin’s value 

soaring in recent months, new investors may be eager 

to get in on the action. All of this plays right into the 

hands of scammers. They blend into the scene with 

claims that can seem plausible because cryptocurrency 

is unknown territory for many people. Online, people 

may appear to be friendly and willing to share their 

“tips.” But that can also be part of the ruse to get 

people to invest in their scheme. In fact, some of these 

schemes are based on referral chains, and work by 

bringing in people who then recruit new “investors.”

Many people have reported being lured to websites

that look like opportunities for investing in or mining 

cryptocurrencies, but are bogus. They often offer 

several investment tiers – the more you put in, the 

bigger the supposed return. Sites use fake testimonials 

and cryptocurrency jargon to appear credible, but 

promises of enormous, guaranteed returns are simply 

lies. These websites may even make it look like your 

investment is growing. But people report that, when 

they try to withdraw supposed profits, they are told to 

send even more crypto – and end up getting nothing

back.

Then, there are “giveaway scams,” supposedly 

sponsored by celebrities or other known figures in the 

cryptocurrency space, that promise to immediately 

multiply the cryptocurrency you send. But, people 

report that they discovered later that they’d simply

sent their crypto directly to a scammer’s wallet. For 

example, people have reported sending more than $2 

million in cryptocurrency to Elon Musk impersonators

over just the past six months. 

Scammers even use online dating to draw people into 

cryptocurrency investment scams. Many people have 

reported believing they were in a long-distance 

relationship when their new love started chatting about 

a hot cryptocurrency opportunity, which they then 

acted on. About 20% of the money people reported 
Consumer Protection Data Spotlight | May 2021 2

losing through romance scams since October 2020 was 

sent in cryptocurrency, and many of these reports were 

from people who said they thought they were 

investing. 4

Since October 2020, people ages 20 to 49 were over

five times more likely to report losing money on

cryptocurrency investment scams than older age 

groups. 5 The numbers are especially striking for 

people in their 20s and 30s: this group reported losing 

far more money on investment scams than on any 

other type of fraud, 6 and more than half of their 

reported investment scam losses were in

cryptocurrency. 7 In contrast, people 50 and older were

far less likely to report losing money on 

cryptocurrency investment scams. But when this group

did lose money on these scams, their reported 

individual losses were higher, with a median reported

loss of $3,250.

To be clear, while investment scams top the list as the 

most lucrative way to obtain cryptocurrency,

scammers will use whatever story works to get people 

to send crypto. That often involves impersonating a 

government authority or a well-known business. For 

example, many people have told the FTC they loaded 

cash into Bitcoin ATM machines to pay imposters

claiming to be from the Social Security 

Administration. Others reported losing money to

scammers posing as Coinbase, a well-known 

cryptocurrency exchange. In fact, 14% of reported 

losses to imposters of all types are now in 

cryptocurrency. 8

Here are some things to know to play it safe(er) 

when it comes to cryptocurrency:

• Promises of guaranteed huge returns or 

claims that your cryptocurrency will be 

multiplied are always scams.

• The cryptocurrency itself i s the investment. 

You make money if you’re lucky enough to 

sell it for more than you paid. Period. Don’t 

trust people who say they know a better 

way.

• If a caller, love interest, organization, or 

anyone else insists on cryptocurrency, you 

can bet it’s a scam. 

To learn more about cryptocurrency scams, visit 

ftc.gov/cryptocurrency. If you spot a scam, report it to

the FTC at ReportFraud.ftc.gov.
Consumer Protection Data Spotlight | May 2021 3

 

1 This Spotlight is based on reports from consumers to the FTC or to any Consumer Sentinel Ne twork data contributor.

2 This figure is based on 6,792 cryptocurrency investment scam reports submitted from October 1, 2020 through March 31, 2021. Cryptocurrency investment scam reports 

here and throughout this Spotlight are defined as reports categorized as investment related fraud that indicate cryptocurrency as the payment method. The investment 

rela ted fraud ca tegory includes the following fraud subcategories: art, gems and rare coin investments, investment seminars and advice, stocks and commodity futures 

trading, and miscellaneous investments. About 92% o f cryptocurrency investment scam reports from October 1, 2020 through March 31, 2021 are classified as 

miscellaneous investments.

3 From O ctober 1 2019 through March 31, 2020, people submitted 570 cryptocurrency investment scam reports indicating $7.5 million in total losses.

4 This figure is based reports submitted from O ctober 1, 2020 through March 31, 2021 that were classified as romance scams. Reports that did not specify a payment 

m e thod are excluded. Of these, 1,147 reports totaling $35 million in reported losses indicated cryptocurrency as the payment method. These reports are distinct from 

reports classified as investment related fraud, with no overlap between the two .

5 About 86% of cryptocurrency investment related fraud reports submitted from October 1, 2020 through March 31, 2021 included age information. This age comparison is 

norm alized based on the number o f loss reports per million population by age during this period. Population numbers were obtained from the U.S. Census Bureau Annual 

Estim a tes o f the Resident Population for Selected Age Groups by Sex for the United Sta tes (June 2020).

6 This ranking is based on a comparison of Sentinel fraud subcategories. From October 1, 2020 through March 31, 2021, consumers ages 20-39 reported $114 million in 

total losses on frauds classified as miscellaneous investments. Ex cluding unspecified reports, the subcategory with second highest reported losses by this age group was 

online shopping with $64 million in reported losses. These figures are not limited to reports indicating cryptocurrency as the payment method.

7 This figure is based on reports submitted from O ctober 1, 2020 through March 31, 2021 that were ca tegorized as investment related fraud and indicated a consumer age 

o f range of 20 to 39. Reports that did not specify a payment m ethod are excluded. Of these, 3,581 reports totaling $35 million in reported losses indicated cryptocurrency 

as the payment method.

8 This figure is based on reports from October 1, 2020 through March 31, 2021 that were ca tegorized as imposter scams. Reports that did not specify a payment method 

are ex cluded. Of these, 3,494 reports totaling $64 million in reported losses indicated cryptocurrency as the payment method. The imposter scams ca tegory includes the 

following fraud subcategories: business imposters, family and friend imposters, government imposters, romance scams, and tech support scams.