FBI Reports $5.6 Billion in Cryptocurrency Scams in 2023, Marking a 45% Increase
In 2023, cryptocurrency-related scams have reached alarming levels, with the Federal Bureau of Investigation's Internet Crime Complaint Center (IC3) reporting losses exceeding $5.6 billion. This figure is based on more than 69,000 complaints related to financial fraud and cryptocurrency scams received by the IC3 this year.
The report highlights a staggering 45% increase in overall losses from cryptocurrency scams compared to 2022. Investment scams have emerged as the most prevalent form of exploitation, accounting for nearly 71% of all cryptocurrency-related losses. Specifically, losses from investment fraud schemes surged from $2.57 billion in 2022 to $3.96 billion in 2023, marking a 53% rise.
Investment fraud typically involves misleading practices designed to entice individuals into investing based on false promises of high returns with minimal risk. The IC3 report also identified other significant crime categories linked to cryptocurrency, including personal data breaches resulting in losses of over $494 million, tech support scams costing over $420 million, and romance scams with losses exceeding $215 million.
Phishing scams contributed to losses of more than $9 million, while business email compromise schemes connected to cryptocurrency saw losses surpassing $4 million.
The states with the highest number of complaints were California, Florida, and Texas, with California alone reporting losses exceeding $1 billion. On a global scale, the top three countries by complaint count were the United States (57,762), Canada (1,236), and the United Kingdom (962).
To combat these scams, the IC3 has provided several recommendations for individuals who suspect they have fallen victim to a cryptocurrency scam:
- File a complaint through IC3.gov, even if no financial loss occurred.
- Include transaction details in the complaint, such as cryptocurrency addresses, amounts, types of cryptocurrencies, transaction hashes, and timestamps.
- Provide information on how you encountered the scammer, the platforms used for communication, and any web domains involved in the scheme.
- Be cautious of cryptocurrency recovery services, especially those that require an upfront fee.
- Individuals aged 60 or older can reach out to the National Elder Fraud Hotline at 833-372-8311 for assistance in filing an IC3 complaint.
The IC3 report emphasizes that the decentralized nature of cryptocurrency, the speed of irreversible transactions, and the ability to transfer value globally make it an appealing target for criminals. Once a payment is sent, the recipient gains ownership of the cryptocurrency and often quickly transfers it to an overseas account for cashing out, complicating recovery efforts for stolen funds.
Timely and accurate reporting of complaints is crucial for aiding law enforcement in investigating fraud schemes that exploit cryptocurrencies.