by Brent Rowland
Cryptocurrency scams and fraud in 2023 contributed to an estimated $5.6 billion in losses, a report from one of the federal government’s top law enforcement agencies says.
The Federal Bureau of Investigation’s Cryptocurrency Fraud Report for 2023 found that the vast majority of losses – about $3.9 million – were related to cryptocurrency investment scams.
“The decentralized nature of cryptocurrency, the speed of irreversible transactions, and the ability to transfer value around the world make cryptocurrency an attractive vehicle for criminals, while creating challenges to recover stolen funds,” FBI Assistant Director Michael Nordwall wrote in the bureau’s latest report. “Once an individual sends a payment, the recipient owns the cryptocurrency and often quickly transfers it into an account overseas for cash out purposes. Rapid and accurate complaint reporting are key to assisting law enforcement in investigating fraud schemes that exploit cryptocurrencies.”
Estimated losses have grown significantly since before the recession and were up 45% in 2023 compared to the year before, according to the FBI report.
Crypto’s popularity has made it a target for criminals.
“As the use of cryptocurrencies grows in popularity for investors, criminals are deploying increasingly complex tactics to deceive and exploit the public,” said Wayne Jacobs, special agent in charge of FBI Philadelphia. “We urge consumers to stay vigilant when navigating this landscape and to report any suspected fraud to the FBI through the Internet Crime Complaint Center at ic3.gov.”
Losses from cryptocurrency-related investment fraud schemes reported to the IC3 rose from $2.57 billion in 2022 to $3.96 billion in 2023, an increase of 53%, according to the FBI.
Some people accumulated massive debt to cover losses from these fraudulent investments. While individuals ages 30-39 and 40-49 filed the most cryptocurrency-investment fraud complaints (about 5,200 reports in each age group), complainants over 60 reported the highest losses (more than $1.24 billion), according to the report.
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Brent Rowland is a reporter at The Center Square.
