FBI Reports $5.6 Billion Lost to Cryptocurrency Fraud in 2023: A 45% Increase from 2022

In a startling revelation, the FBI reported that Americans lost over $5.6 billion to cryptocurrency fraud in 2023, marking a significant 45% increase in losses compared to the previous year. This alarming statistic was highlighted in a report released on Monday, which detailed nearly 70,000 complaints from victims of financial fraud involving popular cryptocurrencies such as Bitcoin and Ether.

The report identified investment fraud as the most prevalent scheme, accounting for a staggering $3.96 billion of the total losses. Michael Nordwall, assistant director of the FBI’s criminal investigative division, noted that the unique characteristics of cryptocurrency—its decentralized nature, the speed of irreversible transactions, and the global transferability of value—make it an appealing target for criminals. These factors also complicate the recovery of stolen funds.

Scammers often initiate contact through dating apps or social media platforms, where they build trust over weeks or even months. Once a rapport is established, they introduce the idea of cryptocurrency investing, leading victims to use fraudulent websites or applications to invest their money. In some instances, victims may be allowed to withdraw small amounts initially, creating an illusion of legitimacy.

Moreover, the report warns that victims may later be targeted by fake businesses claiming to assist them in recovering their lost cryptocurrency. The FBI emphasizes that individuals of all ages are susceptible to these scams and urges extreme caution when approached with investment opportunities from unknown sources.

As cryptocurrency continues to gain popularity, awareness and education about potential fraud schemes are crucial in protecting individuals from falling victim to these deceptive practices. The FBI encourages everyone to remain vigilant and skeptical of unsolicited investment proposals, especially from individuals they have never met in person.