Home / Bitcoin / $ 100M + lost due to Crypto Scams and only $ 36M recovered by US regulators. How to protect yourself?

$ 100M + lost due to Crypto Scams and only $ 36M recovered by US regulators. How to protect yourself?

As reported by Wall Street newspaperUS regulators have presented over 90 cases of cryptocurrency fraud in the last two years and have little to prove.

The report states that US regulators at federal and state levels could only recover $ 36 million in investor funds lost from fraud.

$ 100s of millions lost to encrypt fraud

This number is just a drop in the bucket when you consider the amount of money lost due to cryptographic scams in the last two years.

While it is difficult to estimate the huge amount of money lost for fraud, Bitcoin.com estimates that they are $ 100 million over the last 2 years. According to their data, they even went so far as to say that the amount of money lost equals $ 23 million a day if you include the 3 largest cryptograms of Coincheck, Bitconnect and Bitgrail.

Fraudulent lawsuits

According to the Wall Street Journal report, US regulators have found it difficult to trace funds lost due to the anonymous and borderless nature of cryptocurrencies. The Journal also noted that the number of archived cases has exploded since cryptography markets have declined.

In 2017, when the prices of the encryption were becoming parabolic, people presented only 4 cases of fraud during the whole year. In 2018, only last month alone, the Securities and Exchange Commission (SEC) has seen 5 archived fraud cases. It seems that people have more time available during this bear market and are trying to recover losses.

While the SEC and other US regulators have not been able to recover a significant amount of funds lost, state regulators have introduced over 70 cryptocurrency actions this year and have dramatically increased the number of legal actions against cryptocurrency fraud.

While these actions can help reduce fraud and penalize managers, most investors are not lucky to get their money back.

Avoid yourself falling victim to cryptic fraud

As seen from the facts and data mentioned above, cryptographic scams are spreading through space. As a crypto-investor, it is important to understand how to identify scams and avoid them at all costs.

Initial coin offerings (ICO)

One of the most common scams of 2017 and the beginning of 2018 came from initial coin offerings (ICO). There are a number of ICOs launched just to collect investors' money and have no intention of creating a profitable product or offering what they have promised.

In addition, some genuine ICOs mismanaged their projects and had unrealistic goals and expectations. Therefore, many investors lost money in this space when fraud was not even the initial objective.

Social media and fake websites

Many scammers create fake Twitter profiles, Telegram accounts, e-mail addresses and even fake websites to trick people into sending them cryptocurrency or providing them with private keys, personal information, etc.

This is the reason why many important Twitter users have (Not Giving Away ETH) or (Not Asking for ETH) in their Twitter names. To avoid scams on social media, users must never send ETH or any encryption and do not provide any entity or service with their private keys.

Users should always check the website address to make sure it is spelled correctly and check the top left corner of a web page to see if the site has a valid security certificate.

Pyramid schemes and pumping and unloading groups

A pyramid scheme is a manual example of a Ponzi scheme or scam. Investors should avoid any project that actively encourages the recruitment of new investors to maximize profits. Furthermore, schemes that promise massive yields and other unrealistic incentives are probably scams.

Pumping and unloading groups are another very popular scam for which people fall in love. These groups use social media channels like Telegram, Discord, Slack, etc. And they invite people to invest in some coins just to inflate them and then download them later.

The creators of these types of groups allow the price to accumulate by convincing investors to buy more, and then sell all their coins to the members they are buying.


The scams and types of fraud mentioned here only scratch the surface. Investors in the cryptocurrency sector must remain diligent in the awareness and understanding of the space since the encryption of fraud is rampant.

Whenever there are opportunities and money, the scammers will exploit unsuspecting people. People have already lost millions of dollars and people will lose millions more, but make sure you do not contribute to this number.

Do you think the SEC and other regulators will soon develop structures to help prevent fraudulent encryption? Greater regulation could even help prevent fraudulent encryption? Let us know what you think in the comments section below.

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