As interest in cryptocurrency grows, scammers are using increasingly sophisticated tactics to target prospective investors in states including Georgia, Florida and Texas.

“While digital assets like cryptocurrency can be very convenient, their ease of use is exactly what makes them so risky and a common vehicle for cybercrime,” said Adam Nasli, head broker analyst at BrokerChooser.

“Cryptocurrency scams have moved on far beyond simple spam emails and have become increasingly sophisticated with time,” Nasli said. “They can target victims through social media, fake apps or companies, coaching and ‘celebrity endorsements.’ These are all ways in which you can be scammed.”

A new study from BrokerChooser, an online broker comparison website, analyzed 2024 FBI data to examine the financial impact of reported cryptocurrency fraud across the United States.

The company then compared each state’s reported losses with the cost of in-state college tuition to illustrate how many degrees could have been funded with the money lost to cryptocurrency scams.

According to BrokerChooser’s analysis, Florida, Georgia and Texas ranked among the five states with the highest reported cryptocurrency fraud losses. Combined, the losses recorded in those three states were equivalent to the cost of hundreds of thousands of college degrees, the company said.

California recorded the highest losses, with FBI data showing more than $2.5 billion in reported cryptocurrency fraud.

Vermont recorded the lowest total, with reported losses of approximately $11.3 million.

How cryptocurrency course scams can work

Cryptocurrency course scams often use polished lifestyle marketing to sell expensive educational programs that provide little value. In some cases, the program does not exist at all.

The FBI warns these scams can involve social media solicitations, fake cryptocurrency platforms, fraudulent companies, investment coaching and online courses.

Promoters may advertise luxury cars, large homes and private travel to create the impression that cryptocurrency trading has made them wealthy. Social media advertisements then promise prospective customers access to a “secret system,” exclusive strategy or simple path to earning large profits.

Some operations begin by offering a low-cost webinar or introductory course. Once a customer signs up, sales representatives may pressure them to purchase more expensive mentorship programs, private chat groups or so-called VIP memberships that can cost thousands of dollars.

Victims may later discover that the material consists largely of basic or outdated information available online for free. Others may be directed to questionable cryptocurrency exchanges, investment platforms or digital tokens promoted by the course operator.

In some cases, participants are encouraged to earn money by recruiting new customers or reselling the same course, creating an affiliate structure in which marketing the program becomes more lucrative than the cryptocurrency instruction itself.

Paid Signal or WhatsApp groups can present another risk. Operators may charge subscribers for instructions about when to buy or sell certain assets. Those recommendations can expose investors to steep losses, particularly when promoters use their audiences to inflate a token’s price before selling their own holdings, a practice commonly known as a pump-and-dump scheme.

Fraudulent trading platforms may also display fabricated profits to persuade victims to deposit more money. When investors attempt to withdraw their funds, they may face additional fees, blocked accounts or demands for further payments.

Texas tops the list as 2nd worst state for crypto course scams

According to the analysis, FBI data shows Texas reported nearly $1.4 billion in crypto fraud losses. 

The per capita loss rate was estimated around $4,262,396. 

The company’s cross-analysis of public tuition costs and reported scam losses showed that Florida could have funded 65,938 college degrees with that money instead.

Florida named 3rd worst state for crypto course scams, study says

The study shows Florida ranked number 3 worst state for crypto course scam losses.

Florida has reported nearly $1.07 billion in cryptocurrency course scams, according to FBI data.

BrokerChooser says their analysis shows this money could’ve gone towards funding nearly 62,608 college degrees.

Georgia comes in 5th place

Georgia is the last state placing in the top 5 worst states for cryptocurrency course scams.

The “Peach State” recorded $420,454,472 in cryptocurrency losses. Although the state ranks nineteenth for losses per capita at $3,719,931, the total loss could have supported 20,774 students through a four-year college education. 

Georgia’s loss highlights that even comparatively lower losses than the top four states still represent thousands of missed opportunities for young Georgians.

IRS warns A.I. is fast tracking crypto fraud schemes

Though BrokerChooser stays away from naming a direct reasoning or causation in its findings, CBS News reports that back in April, the IRS issued an urgent warning to Americans that A.I. is fueling surges in crypto fraud schemes.

If you or someone you know become the target of a cryptocurrency scam, the FBI advises you to immediately stop sending money, report the incident online to the FBI Internet Crime Complaint Center (IC3), and avoid secondary “recovery” scams that claim they can get your lost funds back.

You can file a complaint to the IC3 here.