Crimes in the cryptocurrency industry are no new thing. Fraudsters and scam artists continue to prey on the knowledge gap that exists between investors and the crypto space, even though the industry itself has matured significantly.

However, the continued prominence of these criminal organizations is once more drawing criticism from regulators in the United States.

Earlier this week, an official of the U.S. Securities and Exchange Commission (SEC) tore into crypto scams, calling them the ”flavor of the year” for fraudsters. Peter Diskin, who works as an Assistant Director at the SEC’s Atlanta office, explained that fraudsters had been known to leverage several popular sectors to run their scams at a virtual event. It appears that crypto is now a hotbed for them.

Diskin pointed out that most crypto scams tend to play on peoples’ feelings and the fear of missing out (FOMO). Many individuals have seen how big Bitcoin and several other large-cap assets have grown in the past few years, and they want to get in on the action. Sadly, this is a loophole criminals use to commit crimes.

The official also explained that crypto is an attractive spot for international scammers because of its anonymous nature. Money can easily be moved from a bank account in the United States to some location overseas using crypto. So, tracking and compliance are challenging.

In truth, scams and fraudulent operations in crypto have continued to grow – even in the past year. Recently, the Commodity Futures Trading Commission (CFTC) reported that it had gotten over 7,000 complaints of reported crypto and digital asset scams between October 2020 and May 2021. The report pointed out that the median loss stands at $1,900, marking a 12-times increase in complaints and a 100-times jump in median losses from the same period a year earlier.

Emma Fletcher, a program analyst at the agency, pointed out that crypto enthusiasts are known to gather online to discuss their favorite coins. With prices skyrocketing in the past few months, these discussions have become more rampant, and scammers can now “blend into the scene with claims that can seem plausible.” These scammers also take advantage of their victims’ relative ignorance, who see crypto as a means to get rich quickly.

Besides the ignorance of victims, Diskin also criticized celebrities who promote cryptocurrency projects and scams. Some have knowingly lent their credibility to scam projects, while others have been conned into promoting them.

Indeed, there have been several crypto scams affiliated with celebrities in the past. Names like Kevin Hart, Floyd Mayweather Jr, DJ Khaled, and Clifford “T.I” Harris Jr. have all been indicted at some point in connection with crypto scams.

Veteran actor Steven Seagal was indicted for promoting a crypto mining scam operation that reportedly duped over 500 investors. The investors lost about $11 million to the scammers. Seagal eventually agreed to pay $300,00 in fines for endorsing the project.

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