Crypto numbers can be unreliable—according to some studies, up to 90 percent of trading on most exchanges is “wash trading”: fake trades designed to generate a false impression of volume, which in turn attracts more traders and influences prices. But the numbers we do have, while approximate, speak to a booming industry defined largely by volatile speculation and fraud. In 2021, consumers spent an estimated $25 billion on non-fungible tokens, or NFTs (a crypto subindustry in which wash trading is also endemic). During the same period, DeFi scams robbed people of more than $10 billion. The crypto industry has seemingly endless cash (some endorsement deals involve crypto or company equity) to splash around on stadium naming rights, commercials with Matt Damon and LeBron James, and tech-industry talent. Mirroring aspects of multilevel marketing, in which participants are compelled to bring in new suckers through the door, crypto is both the preeminent get-rich-quick scheme of our time and mistrusted by many. That dissonance—where potential financial opportunity, however deceptively sold, meets extreme risk—is a hallmark of the golden age of fraud.
A quick look at consumer data and government reports shows that now is a good time to be a scammer. From catfishing—a quarter of all fraud reported to the Federal Trade Commission last year originated on social media—to identity fraud, ransomware, and old-fashioned phone scammers trying to wheedle bank information out…
