3 December 2024

Washington Ranks Among Top States Affected by Cryptocurrency Fraud in 2023

In 2023, Washington state faced significant cryptocurrency fraud, with the FBI reporting over 69,000 complaints and losses surpassing $5.6 billion nationwide. The state ranks among the top affected areas in the U.S.

Washington Ranks Among Top States Affected by Cryptocurrency Fraud in 2023

In 2023, the FBI documented over 69,000 complaints related to cryptocurrency fraud, leading to staggering losses exceeding $5.6 billion. Washington state has emerged as one of the most impacted areas in the United States, with significant financial repercussions for its residents.

The FBI reported a dramatic 45% increase in losses compared to the previous year, highlighting the growing threat of cryptocurrency-related scams. The complaints received by the FBI’s Internet Crime Complaint Center encompassed a variety of fraudulent activities, including tech support scams, investment fraud, and government impersonation schemes. Notably, investment fraud involving cryptocurrency accounted for a staggering $3.9 billion of the total losses.

In addition to these alarming statistics, local scams have also proliferated, such as a recent case in Lynnwood where individuals were solicited for funds under the guise of financing a child’s surgery.

FBI Director Christopher Wray emphasized the urgency of the situation, stating, “Scams targeting investors who use cryptocurrency are skyrocketing in severity and complexity. The best way to help stop these crimes is for people to report them to ic3.gov, even if they did not suffer a financial loss. The information allows us to stay on top of emerging schemes and criminals’ use of the latest technologies, so we can keep the American public informed and go after those who commit these crimes.”

Scammers frequently initiate contact through dating apps or social media, building trust over weeks or months before proposing cryptocurrency investments. Once a rapport is established, these fraudsters often direct victims to counterfeit websites or applications, sometimes allowing them to withdraw small amounts initially to create an illusion of legitimacy.

In terms of statistics, Washington ranked fifth in the number of complaints and seventh in total financial losses, with residents losing over $140 million to cryptocurrency fraud. In stark contrast, California suffered the highest losses, exceeding $1.1 billion in the same year. Other states that made the top ten list included Texas, Florida, New York, New Jersey, Illinois, Arizona, Pennsylvania, and Virginia.

The FBI's report noted, “Law enforcement can trace cryptocurrency transactions to follow money in ways not possible with other financial systems. Nevertheless, since cryptocurrency also allows transfers of funds to exchanges overseas, U.S. law enforcement may encounter significant challenges when following cryptocurrency that enters other jurisdictions, especially those with lax anti-money laundering laws or regulations.”

A notable case in Washington involved the conviction of FTX founder Sam Bankman-Fried, who was found guilty of fraud after allegedly misappropriating at least $10 billion from customers and investors. Once the second-largest cryptocurrency exchange globally, FTX declared bankruptcy in 2022. High-profile celebrities, including NFL quarterback Tom Brady and supermodel Gisele Bündchen, faced lawsuits for their involvement with FTX, accused of lending their credibility to the failed exchange.

Bankman-Fried received a 25-year prison sentence and was ordered to forfeit $11 billion for orchestrating multiple fraudulent schemes.

For more information on Bankman-Fried’s case, read about his conviction for defrauding cryptocurrency customers.

Frank Sumrall is a content editor at MyNorthwest. You can read his stories here and contact him via email.

Source: KIRO 7 News Seattle