For many social media platforms, their biggest worry currently is cryptocurrency scams. In the month of January alone, $4 million was lost to scammers. These people were investing in non-fungible tokens (NFTs).
What are NFTs?
NFTs are cryptographic assets on a blockchain with unique identification codes and metadata that distinguish them from each other. Unlike cryptocurrencies, they cannot be traded or exchanged at equivalency.
OpenSea is the world’s largest marketplace where people buy NFTs. There are five top collections one can purchase on OpenSea. Bored App Yacht Club, Azuki, CLONE X, CryptoPunk, and Mutant Ape Yacht Club.
NFTs are still a rather new concept that people know little about. Generally, younger investors buy crypto from social media platforms. They also turn to platforms like Reddit, Discord, and Twitter, because they are familiar. The Federal Trade Commission (FTC) reports that Instagram and Facebook are the go-to places for scammers to trade.
Through these platforms, crypto scammers will pose as celebrities, family members, or friends. All in order to encourage others to invest in fraudulent NFTs. They ask for people’s contributions through cryptocurrency, promising big returns on their investments.
Looking at the numbers
Well, the FTC report also showed that 64% of the investment scams on social media dealt with absurd cryptocurrency payments. Instant payments linked to bank accounts were the second most popular method. This method trailed much farther behind at only 13% of reported cases.
“Investment-related scams on social media represented 37% of all reported losses, followed by romance scams and online scams,” Axios said in an article.
Actually, investors between the ages of 18 and 39 were more than twice as likely to report losing money to social media scams. This is likely because they are digitally savvy but less financially literate than older investors, according to Axios.
In January alone, crypto scams conned people out of a whopping $4 million. This number does not include losses to online hackers. Gizmodo compiled a list of seven of the largest crypto project scams they could find and the amount they made off of people. Those scams included Blockverse ($1,200,000), Big Daddy Ape Club ($1,200,000), Mercenary ($760,000), CryptoBay VIP ($411,000), Frosties NFT ($150,000), Kingfund Finance ($141,000) and Doodled Dragons ($30,000).
If scams keep going at the rate they are at now, they will only get worse. According to Fortune, the FTC reported $770 million in losses from social media in 2021; 18 times the amount lost in 2017.
