Lloyds Bank, one of the Big Four banks in the United Kingdom, has reported a 23% surge in reports of cryptocurrency investment scams by victims in the current year compared to the same period in 2022. According to Lloyds Bank, an increasing number of investors are facing the threat of falling victim to fraudulent schemes through fake advertisements posted on social media.
The average loss for each victim of a cryptocurrency investment scam has increased to $13,115 (10,741 British pounds), up from $8,562 (7,010 pounds) in the previous year. This surpasses losses from other consumer frauds, such as romance scams or purchase scams.
The report highlights that individuals aged 25–34 constitute a quarter of all crypto scam victims, making it the most prevalent age group affected. Criminal organizations orchestrating these scams adapt their strategies to capitalize on emerging trends, with a recent focus on younger investors attracted by the promise of quick riches through cryptocurrency trading.
Potential cryptocurrency investors typically make an average of three payments before realizing they’ve fallen victim to a scam. Unfortunately, by the time they report the scam to their bank, it takes approximately 100 days from the initial transaction date, making the funds usually irretrievable.
This report aligns 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, making them more vulnerable to scams. Younger generations actively explore new economic opportunities, viewing technologies like cryptocurrency as tools to modernize the financial system.