30 December 2024

FBI Reports Alarming Surge in Cryptocurrency Scams in 2023

The FBI has reported a significant rise in cryptocurrency scams in 2023, with victims losing $5.6 billion. Over 69,000 complaints were filed, highlighting the growing threat of crypto fraud.

FBI Reports Alarming Surge in Cryptocurrency Scams in 2023

In a startling revelation, the FBI has reported a dramatic increase in cryptocurrency scams across the United States in 2023, with victims suffering financial losses totaling $5.6 billion. This figure marks a staggering 45% rise compared to the previous year, highlighting the growing threat posed by crypto-related fraud.

According to the FBI's Internet Crime Complaint Center (IC3), over 69,000 complaints were lodged regarding cryptocurrency fraud, with investment scams involving Bitcoin and other digital currencies accounting for nearly 71% of the total financial losses. While the majority of complaints originated from individuals aged 60 and above, officials noted that younger adults, particularly those aged 30-39, also experienced a significant uptick in crypto-related scams.

"Fraudsters often establish a rapport with their victims over time," a senior FBI official explained during a briefing on the report. These criminals typically initiate contact through social media, emails, or text messages before transitioning conversations to encrypted messaging platforms like WhatsApp.

Additionally, call center scams—including tech support, customer support, and government impersonation schemes—contributed to nearly 10% of the financial losses associated with cryptocurrency fraud, according to the bureau. The trend of increasing cryptocurrency losses has persisted since 2021, with California, Florida, and Texas reporting the highest number of complaints.

While investment scams constituted the majority of losses in 2023, other forms of financial crimes, such as personal data breaches, ransomware attacks, and phishing campaigns, also resulted in billions of dollars in losses. The FBI noted that criminals have exploited various schemes tracked by the IC3 to facilitate cryptocurrency-related fraud.

The decentralized nature of cryptocurrency, coupled with the ability to conduct irreversible transactions globally without traditional financial intermediaries, has made it an attractive target for criminals. Law enforcement agencies face significant hurdles in tracing these transactions, especially when they are transferred to exchanges located overseas.

Furthermore, the report highlighted the increasing use of cryptocurrency kiosks—ATM-like machines that allow users to exchange cash for digital currencies—in financial fraud schemes. The FBI received over 5,500 complaints involving these kiosks, which resulted in losses exceeding $189 million.

To combat cryptocurrency-related fraud, the report provides essential tips for consumers, emphasizing the importance of verifying the legitimacy of any investment opportunity online. The FBI warns, "If an investment opportunity sounds too good to be true, it likely is."