Americans lost over $5.6 billion to cryptocurrency fraud schemes in 2023, according to a report released by the FBI.
This figure, brought to light on Monday, represents a significant 45% increase compared to the losses reported in 2022.
The FBI received nearly 70,000 complaints related to financial fraud involving cryptocurrencies such as Bitcoin and Ether throughout the year. Investment fraud was the most prevalent scheme, accounting for approximately $3.96 billion of the total losses.
Michael Nordwall, assistant director of the FBI’s criminal investigative division, noted the challenges posed by the decentralized nature of cryptocurrency, which, coupled with the speed and irreversibility of transactions, makes it an attractive target for criminals. These factors also complicate the recovery of stolen funds.
Fraudulent schemes often begin with scammers establishing a relationship with victims through dating apps or social media platforms. Once trust is built, the scammers recommend investing in cryptocurrencies through fake websites or apps. They may even allow small, early withdrawals to create an illusion of legitimacy. Some victims are subsequently targeted by phony recovery services claiming they can help reclaim the lost funds.
The FBI’s report highlights that individuals of all ages are at risk of such scams. The increase in cryptocurrency-related investment scams contributed significantly to the overall rise in fraud losses. In 2023, investment-related losses totaled nearly $4 billion, up from $2.57 billion the previous year.
This report is the first from the FBI to focus specifically on cryptocurrency fraud, marking a departure from the broader annual fraud data. Crypto-related fraud represented nearly half of the record $12.5 billion in online fraud losses reported to the FBI last year.
The FBI is emphasizing the importance of public awareness and encourages victims to report crypto fraud promptly to aid in the recovery of stolen funds. The report also underscores a persistent threat from international scammers and highlights the growing use of cryptocurrency in various types of digital crime.
The FBI’s investigation into digital crimes extends beyond cryptocurrency, covering issues like ransomware attacks and tech-support scams, which also contribute to significant global financial losses. The report reveals that fraud involving cryptocurrencies remains a major concern, with many perpetrators operating from overseas, including regions in Southeast Asia.
Notably, individuals over 60 reported losses totaling $1.6 billion in 2023, illustrating that older adults are particularly vulnerable to these schemes.
With input from the Associated Press and CNN.
