Survey Reveals Higher Risk of Crypto Scams for Younger Investors

Updated: 23 March 2023

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Don’t invest unless prepared to lose all the money you invest. This is a high-risk investment, you shouldn’t expect to be protected if something goes wrong.

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What – Scams have become increasingly prevalent in the cryptocurrency industry as scammers believe blockchain technology offers anonymity and untraceability.
Why – Unfortunately, investors have fallen prey to these scams, and a recent survey has shed light on the victims who lose money to these schemes.
What Next – Surprisingly, the most tech-savvy generation has been hit the hardest.

Gen Z Significantly Lost To Scammers

Kaspersky’s latest report has uncovered a disturbing trend in the cryptocurrency industry – Gen Z is the most exploited group regarding crypto scams. The survey, which included 2,000 American respondents, has revealed some shocking statistics. Of those surveyed, 24% admitted to investing in the crypto market, and almost half (47%) of individuals aged 18-24 revealed that they had their cryptocurrencies stolen at some point.

These findings are concerning, given that Gen Z is generally perceived as tech-savvy and knowledgeable about the latest digital trends. With scams becoming more sophisticated and challenging to detect, educating this generation on identifying and avoiding potential risks is crucial.

It’s worth noting that the percentage of older investors who have fallen victim to crypto scams is significantly lower, with only 8% of those aged 55 and above reporting that their crypto has been stolen at some point. However, it’s important to consider that younger people are more likely to invest in crypto, which increases their exposure to these scams.

This, coupled with the fact that Gen Z is more likely to engage in risky behaviors online, such as sharing personal information and downloading unverified apps, puts them at higher risk of falling prey to crypto scams. As the cryptocurrency market continues to grow, it’s crucial for investors of all ages to educate themselves on the risks involved and take measures to protect their investments.

The survey’s results indicate a clear age divide in the crypto investment landscape. Nearly 4 out of 10 respondents aged 25-44 reported owning crypto assets, while only 1 in 10 respondents aged 55 and above reported investing in the crypto industry.

Additionally, the findings revealed that a third of all respondents who had invested in crypto had experienced theft of their digital assets. Shockingly, one-third of the respondents had also fallen victim to scam websites and investment scams, resulting in severe consequences such as identity theft and compromised payment details.

How Crypto Investors Are Safeguarding Their Digital Assets

In addition to writing down seed phrases and using 2FA, the survey found that 19% of respondents stored their cryptocurrencies on hardware wallets, while 16% used software wallets. Meanwhile, only 4% of respondents kept their crypto assets on exchanges, which can be more vulnerable to hacks and theft.

The survey also highlighted the importance of education and awareness in protecting crypto assets. Around 35% of those who fell for scams said they did not fully understand the investment before making it, and 21% said they did not do enough research. This suggests that better education and awareness programs could help prevent some investors from falling victim to scams.

Overall, the survey suggests that while there is still a lot of work to be done to protect crypto investors, many are taking steps to safeguard their assets, including using 2FA and hardware wallets. However, more needs to be done to improve education and awareness to prevent investors from falling for scams and losing their investments.

To summarize, the Kaspersky survey revealed that 25% of investors store their seed phrases and private keys on password management solutions, 18% store them in plain text on their phone or PC, 18% store them in an archive with a password on their phone or PC, and 17% use third-party software.

These findings highlight that a significant portion of crypto investors may not be properly securing their assets, leaving them vulnerable to hacks and theft. It is important for investors to understand the best practices for securing their crypto assets and to use secure storage options such as hardware wallets and cold storage.

Kaspersky’s Senior Security Researcher, Marc Rivero, advises crypto investors to use extra security measures, such as multi-factor authentication and strong passwords, to protect their assets.

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