FBI – Crypto Scams Make Up Just 10% of Financial Crime, 60+ Age Group Most Vulnerable
- The Federal Bureau of Investigation (FBI) reports that in 2023, 90% of financial crime cases were related to traditional finance and 10% to crypto.
- Older individuals are more vulnerable to crypto scams, which highlights the importance of blockchain education.
- Scam schemes are becoming more sophisticated, using advanced technologies like deepfakes.
The FBI released its Cryptocurrency Fraud Report for 2023, which reveals that only 10% of financial scams in the US are crypto-related.
Meanwhile, malicious actors continue to hone their creativity. Unidentified scammers deepfaked Apple's CEO Tim Cook during the new iPhone's presentation to trick viewers into investing in crypto.
TradFi Is the Real Cybercrime HotbedThe FBI's report exposed a surprising fact: despite the industry's reputation as a cybercriminal hotbed, crypto only constitutes 10% of financial crime.The crypto market indeed lacks clear regulation, and many projects operate outside the purview of the traditional financial system. Volatility is another factor that adds to the perceived danger of crypto investments.
Yet, traditional investment schemes account for 71% of all financial fraud cases. The prevalence of crypto scams aligns with call center and government impersonation scams, accounting for 10% of reported cases each.
Pig Butchering and Fake ATMs - Crypto Scam StatsAmong crypto scams, the most common are confidence schemes, where bad actors gain the victim's trust to give investment advice.
Similarly, pig butchering scams hinge on the victim's belief they are in a romantic relationship with the criminal. Other typical crypto-related fraud schemes in the US include fake ATMs, rug pulls, and Play-to-Earn games.
Of the 70K reported cases, 6 involved threats of violence, 39 harassment or stalking, and 133 identity theft. Malware is also relatively rare, with just 27 reported cases.
People over 60 are the worst-affected age group, followed by individuals aged 30-49. Gen Z is the least likely to fall for a crypto scam, possibly due to higher technological literacy.
Although crypto accounts for a small percentage of financial crime, the number of cases grows every year. The FBI received nearly 20K more complaints in 2023 than in 2022. Since 2017, the number of cases has grown by 65K.
Losses from crypto scams grow proportionally to the number of cases. In 2023, US citizens lost over $5.5B compared to $3B two years prior.
Deepfake Scam Targets Apple FollowersApple's Glowtime event, where the company introduced the iPhone 16, attracted over 21M viewers. Unfortunately, another 355K users watched a fake Tim Cook presentation encouraging them to send crypto to a contribution address and get double their sent amount.
The fake Apple account had a verified badge. YouTube confirmed the issue on its X account and urged users to report deepfake videos.
The platform has since deactivated the scammer account, but the extent of victims' losses is still unknown.
Earlier this year, the Australian Securities and Investment Commission (ASIC) warned of the rise of AI-driven schemes like deepfakes. In 2023, Australian investors lost over $1.3B to AI-powered crypto scams.
Closing RemarksDespite a significant increase in crypto-related scams, they still represent a relatively small portion of financial crime cases.
Traditional investment schemes remain the primary source of financial fraud. This highlights the importance of continued efforts to educate the public about various types of scams.
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