Crypto Fraud Cost Americans $5.6 Billion in 2023: A 45% Increase from 2022

In a startling revelation, a recent report from the FBI has highlighted that Americans lost a staggering $5.6 billion to cryptocurrency fraud in 2023, marking a 45% increase compared to the previous year. The report indicates that over 69,000 individuals reported being victims of crypto-related scams, underscoring the growing threat of these fraudulent schemes.

Michael Nordwell, assistant director of the FBI’s Criminal Investigation Division, noted, “While cryptocurrency-related complaints make up only about 10% of all financial fraud complaints, they account for nearly 50% of the total financial losses.” This alarming statistic reveals the disproportionate impact of crypto scams on victims’ finances.

Scammers often employ tactics that involve building online relationships with their targets, luring them into making investments through fraudulent apps or websites. Romance scams, where fraudsters target lonely individuals on dating platforms, are particularly prevalent. Victims may find themselves investing tens of thousands of dollars, only to encounter barriers when attempting to withdraw their funds. Often, they are told they must pay additional fees, ultimately leading to total loss of their investments.

Interestingly, while individuals over 60 years old filed the most complaints, there was a significant number of reports from those in their 30s and 40s, indicating that this issue affects a wide demographic.

Geographically, California topped the list for the highest number of complaints and losses, with nearly $1.2 billion reported lost to scams. Following California were Florida, Texas, New York, and Washington, with Texas reporting losses of $412 million and Florida at $390 million.

Lindsay Torrico, executive director of the American Bankers Association Foundation, emphasized the importance of consumer education in combating these scams. “The number of sophisticated crypto scams is growing, and we appreciate these federal agencies and organizations joining us in educating consumers about the threat they pose,” she stated. “It’s critical that consumers know the red flags to look out for so that no one loses their hard-earned savings to these skilled criminals. You can protect yourself if you know what to look for.”

As the landscape of cryptocurrency continues to evolve, awareness and education remain vital tools in preventing financial losses from these increasingly sophisticated scams.