11 October 2024

Cryptocurrency Fraud Losses Surge by 45% in 2023, Exceeding $5.6 Billion

In 2023, cryptocurrency-related fraud losses soared to over $5.6 billion, a 45% increase from the previous year, according to the FBI.

Cryptocurrency Fraud Losses Surge by 45% in 2023, Exceeding $5.6 Billion

In a startling report released by the FBI, cryptocurrency-related fraud has led to staggering losses exceeding $5.6 billion in 2023, marking a significant 45% increase compared to the previous year. The FBI’s Internet Crime Complaint Center (IC3) reported receiving over 69,000 complaints related to financial fraud involving cryptocurrencies. Notably, these cryptocurrency-related complaints constituted approximately 10% of the total financial fraud complaints received by the IC3, yet they accounted for nearly 50% of the total financial losses reported.

The FBI highlighted that the most common form of exploitation of cryptocurrencies was through investment scams, which alone accounted for about 71% of all cryptocurrency-related losses. Additionally, call center frauds, including tech support scams and government impersonation schemes, contributed to around 10% of the losses associated with cryptocurrency fraud.

The decentralized nature of cryptocurrencies, coupled with the rapid and irreversible nature of transactions, makes them particularly appealing to criminals. This poses significant challenges for law enforcement agencies in recovering stolen funds. The FBI emphasized the importance of prompt and accurate reporting of complaints to aid in the investigation of fraud schemes that exploit cryptocurrencies.

In an effort to combat this growing issue, the American Bankers Association Foundation, in collaboration with the FBI and other federal agencies, has released a new infographic aimed at educating consumers about the rising threat of cryptocurrency investment scams. This infographic outlines five critical warning signs that consumers should be vigilant about, including unsolicited contact from unknown individuals and requests to limit communication with financial institutions or advisors.

In other financial news, the Consumer Price Index (CPI) saw a rise of 0.2% in August, maintaining the same increase as the previous month, with an annual increase of 2.5%, according to the Labor Department.

Additionally, an SEC official has proposed a potential exception for banks regarding the accounting restrictions on digital assets, while the Office of Foreign Assets Control (OFAC) has extended recordkeeping requirements for certain foreign transactions from five to ten years.

The House Small Business Committee has also advanced legislation aimed at strengthening federal standards that require regulatory agencies to consider the economic impact of regulations on businesses. Meanwhile, the Office of the Comptroller of the Currency (OCC) has allowed bank closures in four states affected by Tropical Storm Francine, and concerns have been raised regarding the Federal Reserve’s proposal to revise Regulation II, which could potentially lead to many Americans becoming unbanked.

Source: ABA Banking Journal