FBI Reports Record $5.6 Billion Losses in Crypto Fraud in 2023

• Investment fraud is responsible for 71% of the $5.6 billion in crypto losses.
• Victims aged 60 and older reported a fraud rate of $1.6 billion, with California topping the fraud statistics.

The FBI’s Internet Crime Complaint Center (IC3) has revealed a sharp increase in cryptocurrency-related fraud. Americans will lose $5.6 billion in 2023, a 45% increase from the previous year. The IC3’s annual report recorded over 69,000 complaints, underscoring the growing exploitation of digital currencies in various scams.

Investment fraud was the most expensive form of crypto fraud, accounting for 71% of total losses, or $4 billion. One of the most widespread types of fraud is the so-called “pig butchering” fraud, in which fraudsters establish relationships with victims online and convince them to invest in fraudulent platforms. The FBI noted that many victims ended up with significant debt as a result.

Meanwhile, while crypto fraud only accounted for 10% of total financial complaints, it contributed to nearly half of total monetary losses. Victims over the age of 60 were hit the hardest, with losses of $1.6 billion. California recorded the highest complaints and losses at 9,522 and $1.2 billion, respectively.

The FBI also highlighted the connection between crypto fraud and human trafficking, particularly in Southeast Asia. Criminal gangs recruit workers through fake job postings and then coerce them into scams. The report warned U.S. citizens about the risks of traveling abroad for work.

Additionally, the FBI pointed to crypto kiosk scams that resulted in over $189 million in losses. Due to the anonymity of ATM transactions, scammers often use kiosks to scam victims through schemes such as extortion and romance fraud.

Additional Concerns and Warnings

The FBI also warned of emerging trends like play-to-earn scams, which trick users into purchasing tokens for online games, only to find their wallets frozen. Victims are also warned of fraudulent services claiming to recover lost crypto. These schemes take advantage of vulnerable users looking to recover their stolen funds, adding another layer of deception to the evolving crypto fraud landscape.

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