Cryptocurrency Fraud Skyrockets: FBI Reports 45% Increase in Losses

Losses from cryptocurrency frauds surged by 45% in 2023, totaling over $5.6 billion. The rapid pace and irreversibility of digital transactions made them prime targets for scammers. Investment scams were the major contributor, accounting for 71% of losses. Senior citizens faced the highest losses at $1.6 billion.

In a startling revelation, the U.S. FBI reported on Monday that losses from cryptocurrency-related frauds and scams surged by 45% in 2023 compared to the previous year, accumulating to over $5.6 billion. The swift and irreversible nature of digital asset transactions provided an optimal environment for scammers to exploit.

As the popularity of cryptocurrencies like bitcoin and ether soared due to their increasing token prices and the advent of exchange-traded funds tracking their values, the FBI's Internet Crime Complaint Center noted a corresponding uptick in criminal activities involving digital currencies. Even though crypto transactions are publicly recorded on blockchains, facilitating fund tracing, money often gets transferred swiftly overseas, encountering regulatory hurdles like weak anti-money laundering laws.

The report highlights that investment scams tied to cryptocurrency represented 71% of overall crypto-related losses. Additionally, call center scams and fraudulent government impersonation attributed to 10% of the losses. Senior citizens over the age of 60 were particularly affected, suffering losses amounting to more than $1.6 billion. The FBI indicated that the lack of financial intermediaries in cryptocurrency transactions allows criminals to engage in illicit activities such as theft, fraud, and money laundering with greater ease.

(With inputs from agencies.)