- The FBI received more than 69,000 cryptocurrency-related fraud complaints in 2023
- Losses hit a record $5.6 billion, a 45% increase from the previous year
- Older adults have been especially vulnerable, with victims over the age of 60 losing more than $1.6 billion in cryptocurrency-related fraud
The FBI’s Internet Crime Complaint Center (IC3) has reported a sharp increase in cryptocurrency-related fraud in 2023, with over 69,000 complaints filed and record losses of over $5.6 billion. According to its 2023 Cryptocurrency Fraud Report, this figure represents a 45% rise from the previous year, highlighting the growing trend of criminals exploiting the decentralized and largely unregulated world of cryptocurrency. A significant portion of these losses stemmed from investment fraud, which accounted for nearly 71% of all cryptocurrency-related losses.
Investment Scams Continue to Dominate
Investment fraud emerged as the most pervasive form of cryptocurrency exploitation in 2023, with criminals preying on the public’s desire for high returns in an uncertain financial landscape. Losses in this category soared to nearly $4 billion, a 53% increase compared to the previous year. These schemes are often elaborate and socially engineered, with scammers using platforms like dating apps and social media to build relationships with victims before introducing fraudulent investment opportunities.
The report noted that “Criminals convince their targets to use fake websites and apps to invest, showing them false profits to build trust,” but when victims attempt to withdraw their funds, they are often told they need to pay additional fees or taxes, only to find that their investments are gone.
Older Victims Suffer the Greatest Losses
While victims of all ages were impacted by cryptocurrency fraud, older adults suffered the most financially. According to the IC3 report, individuals over the age of 60 accounted for more than $1.6 billion of the total losses reported in 2023, with this demographic often targeted in investment schemes due to their relative unfamiliarity with cryptocurrency and financial technology.
The report urges older Americans to exercise caution when approached with investment opportunities, especially when they come from someone met online. “These scams can be devastating, particularly for older individuals who may not have the time or resources to recover from such significant financial losses,” said Michael D. Nordwall, Assistant Director of the FBI’s Criminal Investigative Division.
FBI’s Ongoing Efforts to Combat Fraud
In response to the rising tide of cryptocurrency fraud, the FBI has ramped up its efforts to combat these schemes. The agency’s Virtual Assets Unit (VAU) plays a crucial role in tracing and recovering stolen cryptocurrency, although the decentralized nature of these assets often makes it challenging to retrieve lost funds. The FBI continues to collaborate with law enforcement agencies globally to investigate these cases, but recovery remains difficult once funds are transferred.
“The speed and finality of cryptocurrency transactions make it difficult to trace and recover stolen assets,” Nordwall explained, adding that rapid reporting by victims is critical to helping law enforcement take action.
As cryptocurrency continues to grow in popularity, so too do the risks associated with it, and the headlines that come with reports such as this show just why adoption of cryptocurrencies hadn’t taken off since bursting onto the scene in 2017.
