Crypto Investment Fraud Hits $3.94 Billion in 2023: FBI Report

    Key Takeaways

    • In 2023, US crypto investment scam losses reached $3.94 billion, up 53% from $2.57 billion in 2022.
    • $3.94 billion lost in crypto-related fraud made up 86% of all investment fraud losses in the US in 2023.

    Cryptocurrency-related investment fraud has emerged as a significant concern within the United States, according to a report by the Federal Bureau of Investigation (FBI). In 2023, losses from crypto investment scams surged to $3.94 billion, marking a notable increase of 53% from the previous year’s total of $2.57 billion. 

    The FBI’s Internet Crime Report for 2023 reveals that investment frauds, particularly those involving cryptocurrencies, accounted for a substantial portion of total losses, reaching $4.57 billion in 2023, up by 38% from $3.31 billion in the previous year. Fraudsters are increasingly exploiting custodial accounts held at financial institutions for cryptocurrency exchanges or third-party payment processors, facilitating swift dispersal of funds and exacerbating the scale of losses incurred by victims.

    Furthermore, investment scams, including those related to cryptocurrency, have become the most common form of internet crime in 2023, comprising over a third of the total reported losses amounting to $12.5 billion. The FBI emphasizes that victims are often lured into crypto scams with promises of lucrative returns on their investments, only to suffer significant financial losses as a result.

    Among the various types of crypto scams, romance scams stand out as particularly prevalent, where criminals use fake online identities to manipulate victims into sending crypto under false pretenses. According to Chainalysis, romance scams alone contributed to at least $374 million in suspected stolen crypto in 2023, highlighting the devastating impact of such fraudulent schemes on unsuspecting individuals.

    The Better Business Bureau (BBB) also underscored the growing threat posed by cryptocurrency and investment scams, ranking them as the riskiest type of cons in the U.S. Scammers employ various tactics to deceive investors, resulting in substantial financial losses for victims. The BBB’s annual report revealed that approximately 80% of Americans targeted in crypto and investment scams in 2023 ended up losing money.

    Additionally, a separate report highlighted the prevalence of wallet drainers, a type of malware specifically targeting cryptocurrencies. Wallet drainers reportedly stole $295 million in cryptocurrencies from around 324,000 victims in 2023, further illustrating the diverse array of tactics used by fraudsters to exploit unsuspecting individuals in the crypto space.

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