One of the Big Four banks in the U.K., Lloyds Bank, has said that reports of cryptocurrency investment scams by victims have surged by 23% in the current year compared to the same period in 2022.
According to a press release published by Lloyds Bank, an increasing number of investors face the threat of falling victim to fraudulent schemes through a wave of fake adverts posted on social media. Each victim of a cryptocurrency investment scam is losing an average of $13,115 (£10,741), an increase from $8,562 (£7,010) the previous year. This surpasses losses from other consumer frauds like romance scams or purchase scams.
According to the report, individuals aged 25 to 34 constitute a quarter of all crypto scam victims, making it the most prevalent age group affected. The criminal organizations orchestrating these scams adapt their strategies to capitalize on emerging trends, deceiving more victims into relinquishing their money. Recently, their focus has expanded to include younger investors, enticed by the allure of quick riches through cryptocurrency trading.
Potential cryptocurrency investors usually make an average of three payments before recognizing they’ve fallen victim to a scam. It takes approximately 100 days from the initial transaction date before they report it to their bank. Unfortunately, the funds are usually irretrievable for the bank by this time.
This report from Lloyds Bank corresponds with findings from a Coinbase report on the cryptocurrency landscape, indicating that younger Americans are more receptive to unconventional avenues for financial independence, including crypto, than older generations. This susceptibility makes them vulnerable to scams.
Younger generations actively explore new economic opportunities, laying the foundation for a modernized system and a revitalized version of the American dream. As the report outlines, they see technologies like cryptocurrency as a tool to modernize the system.