SEC Official Calls Crypto Scams the ‘Flavor of the Year’
Right now•1 min read•Regulation
A U.S. Securities and Exchange Commission (SEC) official called crypto scams the “flavor of the year” at a virtual event on consumer fraud Wednesday, according to a report from MarketWatch.
Peter Diskin, an assistant regional director at the SEC’s Atlanta office, said that fraudsters leverage popular sectors such as crypto to get the attention of victims. Diskin pointed out that international criminals have a leg up with crypto scams, because the online and global nature of digital assets can make scams harder to spot, as well as to stop. “Not infrequently the money can be removed from U.S. bank accounts and go overseas, which makes it even more difficult to recoup things if something goes wrong,” Diskin said. Diskin also discussed the prevalence of celebrity endorsements in the crypto world, many of which have been tied to scams, such as actor Steven Segal’s promotion of a fraudulent ICO. Reports of crypto scams have soared recently, with nearly 7,000 people reporting total losses of more than $80 million to the Federal Trade Commission between October 2020 and May 2021, according to a report cited by Marketwatch. The reported median loss was $1,900.