Crypto fraud losses have skyrocketed to $3.96 billion in 2023, according to a recent disclosure by the Federal Bureau of Investigation (FBI). This marks a staggering 53% increase from the previous year’s figures, underscoring the growing threat posed by cryptocurrency-related scams.
The FBI’s latest report, released by its Internet Crime Complaint Center (IC3), reveals that more than 69,000 complaints regarding crypto fraud were lodged in 2023. The report further detailed that total losses from cryptocurrency-related crimes amounted to $5.6 billion, highlighting the extent of financial damage caused by these schemes.
Investment fraud takes center stage
Investment fraud has emerged as the most prevalent form of crypto-related crime, contributing significantly to the overall losses. According to the FBI, scams related to investments accounted for nearly 71% of the total cryptocurrency losses reported in 2023. The agency also pointed out that call center frauds, which include tech support scams and impersonations of government officials, made up about 10% of the losses associated with cryptocurrency fraud.
The report indicates that many victims of these investment scams took on substantial debt to recover their losses. The most affected age groups were those between 30-39 and 40-49. However, individuals aged 60 and above reported the highest financial losses, losing $1.24 billion to crypto fraud in 2023.
Crypto kiosks: A growing tool for fraudsters
Crypto kiosks, or cryptocurrency ATMs, have increasingly become a favored tool for fraudsters. The FBI’s report highlighted that these kiosks offer anonymity, making them attractive to criminals. In 2023, over 5,500 complaints involving crypto kiosks were reported, with losses exceeding $189 million.
Scammers have been using these kiosks to instruct victims on withdrawing and depositing cryptocurrency, often leading to significant financial losses. Moreover, the report mentioned that fraudulent recovery businesses frequently target those who have fallen victim to crypto fraud. These companies claim to trace and recover lost cryptocurrency but often scam victims further.
Emerging scam variants
The FBI’s report also pointed to the rise of new types of scams within the cryptocurrency space. These include liquidity mining schemes and fraudulent play-to-earn gaming applications. Such scams exploit the growing popularity of blockchain-based gaming and the complex nature of decentralized finance (DeFi) to deceive and defraud victims.
The FBI has emphasized the need for public awareness and education. The agency strongly advises individuals to exercise caution when considering investment opportunities, especially those recommended by online contacts they have never met.