SEC Official Calls Crypto Scams the ‘Flavor of the Year’

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 and 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 initial coin offering.
• 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 last October and May, according to a report cited by MarketWatch. The reported median loss was $1,900.