The Federal Bureau of Investigation (FBI) has reported a staggering $5.6 billion lost to cryptocurrency scams in 2023, marking a sharp 45% increase compared to the previous year. According to the FBI’s Internet Crime Complaint Center (IC3), more than 70,000 crypto-related fraud complaints were filed last year, highlighting a troubling rise in cybercrime targeting digital currencies.
Investment Fraud Dominates Losses
A significant portion of these losses—approximately 71%—was tied to fraudulent investment schemes involving popular cryptocurrencies like Bitcoin and Ethereum. The report notes that older Americans, particularly those aged 60 and above, were the most heavily affected. However, younger victims between the ages of 30 and 39 were also targeted in many cases.
Scammers Exploiting Trust through Social Media
Many of the scams began with scammers contacting victims via social media, email, or text messages. These criminals typically build a relationship with their targets, gaining their trust before moving conversations to encrypted messaging platforms like WhatsApp, giving the appearance of legitimacy.
Call Center Scams on the Rise
Another prevalent type of fraud, accounting for roughly 10% of reported losses, involves call center scams. These include impersonations of government agencies or fake technical support representatives aimed at duping unsuspecting victims into handing over sensitive information or money.
Cryptocurrency Kiosks Used in Fraud
Cryptocurrency kiosks—machines that allow users to convert cash into digital currency—are also being leveraged in fraudulent schemes. More than 5,500 complaints were related to these kiosks in 2023, with total reported losses exceeding $189 million.
Challenges in Tracking and Recovery
One of the major hurdles in combatting crypto-related fraud is the decentralized nature of cryptocurrencies. Since digital assets can move across borders without the oversight of traditional banking systems, tracking and recovering stolen funds becomes an immensely challenging task.
FBI’s Warning to the Public
The FBI continues to urge caution, advising people to thoroughly vet any online investment opportunities and to remain skeptical of offers that appear too good to be true.
With the growth of cryptocurrency adoption comes an increasing wave of criminal exploitation, leaving consumers and investors particularly vulnerable. The FBI’s report underscores the critical need for vigilance in navigating the digital financial landscape.
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