Losses From Crypto Scams Spiked 45% to $5.6B in 2023, FBI Reports

• Crypto investment fraudlosses rose to $3.96B in 2023.
• The FBI received nearly 70K complaints of crypto-related fraud in 2023.
• The FBI warns people of all ages to be extremely cautious' when presented with crypto investment opportunities from people they've never met before.

The FBI released the Cryptocurrency Fraud Report on Monday, which found that Americans are increasingly targeted by crypto-related crimes, with a 45% spike in losses since 2022.

Read on to discover more details about the latest crypto crime statistics.

Investment Fraud Is Rampant

On September 9, the FBI's Internet Crime Complaint Center (IC3) reported it received over 69K complaints from victims of crypto-related crimes in 2023.

The report reveals that the total losses from crypto fraud schemes surpassed $5.6B last year. Investment fraud was the most damaging, accounting for almost 71% ($3.96B) of the total losses.

Call center frauds, including tech/customer support scams and government impersonation scams, accounted for about 10 percent of losses associated to cryptocurrency.Michael D. Nordwall, FBI CID

Individuals over 60 suffered the biggest losses, followed by those in the 30 to 49 age group.

However, FBI officials said Americans of all ages should be extremely cautious' when presented with investment opportunities from long-distance friends or people they've never met.

Source: FBICrypto Kiosk Scams Are Rising

The FBI highlighted a surge in new scam varieties, including fraudulent play-to-earn gaming apps and liquidity mining schemes. The scams exploit the rising interest in DeFi and blockchain-based gaming and their complexity to steal victims' money.

The decentralized nature of cryptocurrency, the speed of irreversible transactions, and the ability to transfer value around the world make cryptocurrency an attractive vehicle for criminals, while creating challenges to recover stolen funds.Michael D. Nordwall, FBI CID

Scammers make contact through social media to build trust before convincing the victims to use fake apps or websites to invest their funds. Sometimes, scammers allow their target to withdraw a small amount of moneyat the beginning to make it seem legitimate.

Crypto kiosks, also known as Crypto ATMs, connect to users' digital wallets to make transactions, which normally requires a know-your-customer (KYC) photo ID verification.

The FBI reported over5.5K fraud cases involving crypto kiosks, resulting in $189M losses.

Crypto kiosks have become popular among fraudsters due to their anonymity. Bad actors usually instruct the targets on how to find the kiosk and withdraw cash.

The FBI pointed out that bogus recovery businesses also target some crypto scam victims.

Wrapping Up

Scammers often take advantage of crypto's anonymity and instill a sense of urgencyto convince their targets to make a payment.

Ultimately, educating the public about common scam schemes is the most effective way to fight financial crime.

References

• Federal Bureau of Investigation- Cryptocurrency Fraud Report 2023 (ic3.gov)

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