Investment Scams Dominate as Cryptocurrency Fraud Losses Reach New Highs in 2023

In 2023, cryptocurrency-related financial fraud reached unprecedented levels, with the Federal Bureau of Investigation (FBI) documenting over $5.6 billion in losses from 69,468 complaints, marking a 45% increase from the previous year, 2022. An abundance of statistics was reported, identifying states with the most losses and complaints: California (9,522 complaints) - $1,155,315,595 in losses, Texas (4,770 complaints) - $411,914,142, Florida (5,076 complaints) - $390,222,375, New York (3,202) - $317,311,547, and New Jersey (1,732) - $179,431,143. Investment fraud dominated the types of crimes, with staggering losses of approximately $3.96 billion, representing the majority of the total financial damage incurred. Other complaints include tech support with 8,719 complaints - $494,493,759 in losses, personal data breach (8,716) - $420,904,388, extortion (8,630) - $9,281,906, and confidence/romance (3,749) - $215,821,314.

According to the FBI’s findings, the majority of these crimes exploited the decentralized and fast-paced nature of cryptocurrency transactions, which do not allow for reversals once executed. Notably, victims over the age of 60 suffered the highest losses, totaling over $1.6 billion, underscoring the targeted vulnerability of older individuals in these scams. However, significant losses were reported across all age groups: ages 50-59 lost $901 million, 40-49 suffered $843 million in losses, 30-39 reported $693 million, 20-29 lost $168 million, and those under 20 lost $14 million.

The diverse tactics employed by fraudsters included setting up fake cryptocurrency investment opportunities, often bolstered by fabricated testimonials and falsified returns. These schemes were particularly insidious, as they enabled criminals to establish trust-based relationships with their targets, ultimately convincing them to transfer funds to platforms controlled by the fraudsters where withdrawals were impossible without paying hefty fees that rarely resulted in the recovery of any funds.

The dramatic rise in cryptocurrency fraud in 2023 reflects broader trends in cybercrime, where technological sophistication and the global reach of the internet combine to pose serious challenges for individuals and law enforcement alike. The FBI, alongside other regulatory and law enforcement agencies, continues to urge the public to exercise caution with their digital assets and to report any suspicious activities immediately, helping to combat the evolving tactics of cybercriminals worldwide.