State attorneys general and regulatory agencies are cracking down on cryptocurrency scam artists and bogus crypto companies that are bilking customers out of millions of dollars through fraud, reports Pew Stateline. The Federal Trade Commission (FTC) reported in May that consumers sent more than $2 million to impersonators pretending to be Tesla boss Elon Musk, an avid promoter of cryptocurrency, over the previous six months. From October 2020 to May, nearly 7,000 people reported losses of more than $80 million on that and other fake crypto schemes, with a median loss of $1,900, according to the FTC.
In a preliminary report from the third quarter of this year, the FTC found that people lost $200.8 million from fraudulent cryptocurrency payments, second only to the $202.1 million victims lost from illegitimate bank transfers. Attorneys general in Massachusetts and New York have issued fines and cease and desist orders to stop bogus crypto companies from bilking customers. The Federal Trade Commission has collected thousands of complaints about scams like the fake Musk affair. And some states are considering or have enacted new laws to try to regulate the cryptocurrency market. Investigations nationwide have grown significantly since 2019, when there were 67 investigations of digital asset fraud in all 50 states, he said. A year later, the number of investigations had nearly doubled to 125.