Americans lost $5.6b to cryptocurrency fraud in 2023, reveals FBI

By Gloria Methri

FBI officials advise all individuals, regardless of age, to exercise caution when presented with investment opportunities from unfamiliar sources. The report highlights the necessity of confirming the legitimacy of investment platforms and being wary of offers that appear overly enticing.

The FBI has reported a significant rise in cryptocurrency fraud cases, with Americans collectively losing more than $5.6 billion in 2023, marking a 45% surge from the previous year. The agency’s Internet Crime Complaint Center (IC3) received nearly 70,000 complaints related to cyber-enabled financial fraud involving popular cryptocurrencies such as Bitcoin and Ether, highlighting a worrying trend in the digital financial landscape.

Investment fraud emerged as the most reported type of cryptocurrency scam, accounting for approximately $3.9 billion in losses.

FBI Director Christopher Wray noted, “Scams targeting investors who use cryptocurrency are skyrocketing in severity and complexity.” He urged the public to report suspicious activities at ic3.gov, regardless of whether they suffered a financial loss, emphasising that such information is vital for tracking emerging threats.

The report details various schemes criminals utilise, including tech support scams, romance scams, and government impersonation frauds. Many perpetrators prey on victims’ emotions and sense of urgency, often creating a façade of legitimacy to gain trust.

To combat this rising tide of fraud, the FBI established the Virtual Assets Unit (VAU) in 2022. The VAU centralises cryptocurrency expertise and offers advanced training in blockchain analysis and virtual asset seizure. It plays a critical role in coordinating investigations and fostering collaboration among federal, state, and international law enforcement agencies.

In light of these findings, the FBI has shared essential tips to help the public avoid becoming victims of cryptocurrency scams:

• Be Skeptical of Unsolicited Calls: If you receive a call from someone claiming to be from a well-known company or government agency, hang up and verify the number independently.
• Protect Personal Information: Never provide personal details without confirming the caller’s identity.
• Research Investment Opportunities: Be cautious of offers from strangers, particularly those encountered on social media.
• Watch for Phony Websites: Fraudsters often create websites that closely mimic those of legitimate financial institutions.
• Avoid Suspicious Apps: Only download apps from reputable sources.
• Trust Your Instincts: If an investment sounds too good to be true, it likely is.

As cryptocurrency scams become more prevalent and sophisticated, the FBI’s report serves as a crucial reminder for individuals to remain vigilant. Victims or those who suspect fraudulent activity are encouraged to report incidents to ic3.gov, helping to protect others from falling prey to these increasingly elaborate scams.