According to an official from the Federal Trade Commission (FTC), by the end of February of this year, consumers have already lost around $532 million to cryptocurrency-related scams.
FTC Bureau of Consumer Protection Director Andrew Smith warns consumers that this figure could grow by five or six times by year end:
“Consumers will lose more than $3 billion by the end of 2018.”
Coin Center Director of Research Peter van Valkenburgh explains that one reason why the figures are so high is because people are easily sucked into these kinds of things because they just want to profit more from their investments.
Given the volatility of cryptocurrencies and the tendencies of their prices to skyrocket, absurdly high returns aren’t really impossible. Van Velkenburgh says:
“I think nobody should ever buy any more cryptocurrency, put any more cryptocurrency than what they are completely willing to lose.”
He later added that this message has to be “repeated and repeated.”
Giving advice to potential crypto investors, he says:
“If you yourself are not capable of explaining to somebody what a token’s supposed to do, you should not buy the token.”