• Consumers lost more than $1 billion to crypto scams between January 2021 and March 2022
  • Hackers stole around $1.9 billion in cryptocurrency from January to July this year
  • Customers should not click on "any unsolicited links" shared on social media platforms

While it is fact that the entire cryptocurrency industry is still reeling after the controversial implosion of the crypto derivatives exchange FTX, which wiped out around $2 billion of investors' funds, a new report reveals almost double that amount has been lost to different kinds of scams, including rug pulls, in 2022 alone.

Cybersecurity and data privacy specialists from Privacy Affairs shared in their latest report that between January 2021 and March 2022, consumers lost more than $1 billion to crypto scams. Between January and July this year, hackers reportedly stole around $1.9 billion in crypto, showing a 37% surge over the same period last year.

Despite countless advisories and warnings from authorities, it looks like consumers still fall prey to the creative modus operandi cyber criminals perform.

International Business Times had a chance to talk to Larry Nielsen, an active law enforcement detective in Florida who has spent the majority of his career solving financial crimes, and learn from him the best ways and practices to avoid falling prey to crypto scams.

Nielsen is a certified fraud examiner (CFE) and a cryptocurrency tracing certified examiner (CTCE) and the owner of Fintech Focus Training and Consulting, which helps scam victims track and recover their lost crypto assets, including non-fungible tokens (NFTs).

According to him, consumers should "employ some of the best practices" to not fall victim to online scams. He said it starts by not clicking on "any unsolicited links," especially those sent on social media platforms like Twitter, Instagram and Facebook.

The detective, who also provides cryptocurrency investigation training to local law enforcement in and outside of Florida, said investors should avoid connecting their "non-custodial crypto wallet to any site that you are not 100% sure is legit and when in doubt, don't connect your wallet."

Nielsen also provided tips on what consumers should do in case they become a victim of a scam.

"If you do discover that you have been the victim of a crypto scam/phishing site take note of the site name and get into your device as soon as possible from a safe source, change your passphrase, and note the transaction hashes and receiving wallet addresses of any crypto stolen from you," he said.

The detective noted that it is important for victims to take note of the type of crypto lost, as well as the amount stolen and the date of the transaction.

They should also keep a record of that information "with the related transaction hash(es) and receiving wallet address(es)," as those details "will be invaluable to any law enforcement investigator who will be tracing transactions and attempting to locate your stolen crypto."

It is also crucial to share all the specific information with law enforcement, regardless of whether they will help or not, and not forget to document the report number. Consumers should also report the incident to the FBI Internet Crimes ( and Federal Trade Commission ( as soon as possible since "those reports are also viewable to law enforcement who have access to their system."

Finally, Nielsen has a very important warning for victims of cryptocurrency scams.
"I would not recommend contacting one of the many 'cryptocurrency recovery companies' that you will find on Google as they charge a high upfront fee and they lead you to believe that they will facilitate a recovery which they will ultimately rely on law enforcement to do anyway," the law enforcement detective said.

"If you provide law enforcement with the information mentioned earlier, you have given them a huge head start. I want to make it clear that recoveries are not probable and more often than not, don't happen. Don't be misled," he further said.

"As a law enforcement detective, I have spoken with victims who have hired these companies. I have seen the reports that they provide. I have heard how much they charge victims for 'tracing their stolen or scammed cryptocurrency," Nielsen said.

"I have had to re-trace crypto correctly for victims after they have already paid these companies or traced crypto that was listed in the report but not even traced. I have even seen one of these companies charge a victim thousands and then provide a report where they traced the wrong cryptocurrency. The victim didn't know any better until I explained it to them," he noted.

Illustration shows representations of cryptocurrency Bitcoin and U.S. dollar