Crypto-related Scam Soared 45% In 2023: FBI Report

Key Points:

• Crypto-related scams in the U.S. soared in 2023, with victims reporting $5.6 billion in losses, a 45% increase from 2022.
• While people over 60 filed the most complaints, those aged 30-39 were also heavily affected by crypto fraud.

In 2023, crypto-related scams increased with financial losses amounting to $5.6 billion across the United States, up 45 percent compared to the previous year, according to an FBI report released Monday.

Read more: FBI Crypto Warning Issued Against Unregistered Services

Crypto-related Scams Soar with $5.6 Billion in Losses for 2023

The FBI’s Internet Crime Complaint Center (IC3) received more than 69,000 complaints about cryptocurrency fraud. Of those, investment scams were the most common, accounting for nearly 71 per cent of total losses reported, a figure involving Bitcoin and other virtual currencies.

Whereas most of the complaints were filed by Americans over the age of 60, people in the age group of between 30 and 39 years also had a considerable share of the rise in crypto-related scams. Top of the most-reported list were investment scams, closely followed by personal data breaches, ransomware attacks, and phishing schemes.

The FBI said such broad public promotion of cryptocurrency as an investment opportunity has created opportunities for criminals to take advantage of consumers, who may be more vulnerable when they are unaware of the technology.

The promise of astronomical returns has caused most investors to fall prey, especially now that crypto transactions are irreversible. According to senior FBI officials, criminals have increasingly taken advantage of the “fear of missing out” mindset among retail investors.

The Challenges of Law Enforcement to Trace Crypto-related Scams

Call centre frauds- including tech support, customer service, and impersonation scams aimed at government agencies- account for almost 10% of reported cryptocurrency losses. Cryptocurrency kiosks are stationed inside a store and can be utilized by individuals to change cash for crypto. They were associated with more than 5,500 fraud complaints that were able to self-report losses of $189 million.

The biggest hubs of complaints that emerged were California, Florida, and Texas. Cryptocurrencies are decentralized, meaning many investors can’t track international transactions, which is one reason law enforcement cannot effectively crack down on this kind of scam.

In light of the growing danger, the FBI and other federal bureaus have issued warnings, cautioning the public to be wary about investment opportunities with a crypto element, especially those that involve using dating apps and social media.