Crypto fraud losses skyrocket to $3.96 billion in 2023, says FBI

The Federal Bureau of Investigation (FBI) has disclosed that losses from crypto fraud schemes surged to $3.96 billion in 2023. This is a 53% spike from that of the previous year.

As per the details from its latest report, the FBI’s internet crime complaint center (IC3) received over 69,000 complaints related to crypto frauds in 2023. The FBI also stated that the total crypto losses across all acts come down to $5.6 billion.

Investment fraud dominates the crypto-related crime

Investment fraud emerged as the dominant form of crypto-related crime. The losses from investment scams accounted for almost 71% of all crypto losses. “Call center frauds, including tech/customer support scams and government impersonation scams, accounted for about 10 percent of losses associated to cryptocurrency,” the FBI said.

The FBI highlighted in its report that several individuals took massive debt to cover the losses from the investment frauds. The majority of complaints were filed by the age groups of 30-39 and 40-49. However, the highest losses were reported by the individuals over the age of 60. This age bracket reported a loss of $1.24 billion.

Crypto kiosks become popular among fraudsters

Crypto kiosks or ATMs have become another popular option for fraudsters to cash out cryptocurrency. They have become a popular tool for scammers due to the anonymity they offer. The FBI reported over 5,500 complaints involving these kiosks. The losses were reported to have exceeded $189 million.

These criminals usually direct the individuals on how to find a kiosk, how to withdraw cash, and how to deposit funds. Sadly, all these individuals who have lost money to different schemes are also targeted by fraudulent recovery businesses.

“Representatives from these fraudulent businesses claim to provide cryptocurrency tracing and promise an ability to recover lost funds,” the FBI said.

The agency also highlighted the rise of new scam varieties. These include liquidity mining schemes and fraudulent play-to-earn gaming applications. These frauds exploit the growing interest in blockchain-based gaming and complexity of DeFi to loot victims.

In response to these frauds, the FBI has stressed the importance of public awareness and education. The agency advises individuals to be aware of investment advice, especially from online individuals they’ve never met in person.