The Consumer Financial Protection Bureau (CFPB) released a bulletin last week that highlights complaints the bureau has received related to crypto assets.
From October 2018 to September 2022, the CFPB has received more than 8,300 complaints related to crypto assets, with the majority received in the past two years. About 40 percent of crypto-asset complaints were related to frauds and scams. Also, transactional issues with crypto assets accounted for about 25 percent of complaints, while issues with assets not being available when promised made up about 16 percent of complaints. Overall, poor customer service is a common theme across crypto-related complaints.
“Our analysis of consumer complaints suggests that bad actors are leveraging crypto-assets to perpetrate fraud on the public,” CFPB Director Rohit Chopra said. “Americans are also reporting transaction problems, frozen accounts, and lost savings when it comes to crypto assets. People should be wary of anyone seeking upfront payment in crypto assets since this may be a scam. We will continue our work to keep the payments system safe from fraudsters targeting Americans.”
The CFPB points out that scammers often target crypto-assets since it can be difficult to determine the person or people behind many crypto-asset addresses. Further, there are a number of techniques scammers use to obscure the movement of crypto assets to other accounts.
Among the most common scams are romance scams, where scammers play on a victim’s emotions to extract money. They spend time gaining the victim’s confidence, trust, and romantic affection to get victims to set up crypto-asset accounts, only for the scammers to ultimately steal all their crypto assets. Also, because of the lack of customer service options for many crypto-asset platforms, there are opportunities for attackers to pretend to be customer service representatives to gain access to customers’ accounts and steal crypto assets.
Another scam is where malicious actors deliver the promise of providing goods or services to the victim in exchange for crypto assets, only for the victim to find out the business is fake.