Crypto Fraud to Break Records in 2023 at $5.6 Billion

• FBI Internet Crime Complaint Center Reports Crypto Fraud to Break Records in 2023 at $5.6 Billion
• Investment fraud was the most common and most lucrative, with revenues of approximately $4 billion
• The highest number of victims was between the ages of 30 and 49, but victims over the age of 60 suffered the highest losses, at $1.24 billion.
• However, many crypto fraudsters are also victims themselves, especially human trafficking in Southeast Asia.

The FBI Internet Crime Complaint Center has released a report revealing figures on the rising number of crypto frauds, as well as a record $5.6 billion in 2023, a 45% increase from 2022.

The report also contains many more revealing figures, such as the average age of most victims, which is between 30 and 49, and the highest losses for victims over 60, which amount to $1.24 billion.

However, research conducted in 2022 first by ProPublica and later by the United Nations found that most crypto fraudsters are themselves victims of the slave trade, mainly from Southeast Asia, and work under duress.

Details of the FBI Internet Crime Complaint Center report

This type of fraud is sometimes referred to as “pig slaughter” because scammers often put a lot of time and effort into building a relationship and maximizing the trust of their victims.

Even though IC3 accepts complaints regardless of nationality, 83% of complaints came from U.S. citizens. California residents topped the list with 9,522 complaints.

Nexus of human trafficking

Previous investigations in 2022 by ProPublica and later by the United Nations have shown that most crypto fraudsters work under duress, because they are victims of the slave trade themselves. They have accumulated huge debts and are forced to pay them back in this way.

According to the FBI report, entire “pig slaughter gangs” are behind this, operating mainly in Southeast Asia and offering fake job openings that act as a trap.

“These compounds hold workers against their will and use intimidation to coerce workers into participating in scams. Criminal actors post fake job advertisements on social media and online job boards to target people, primarily in Asia. Workers are often told to pay for travel and other expenses, which means the worker starts out in debt. They must then pay off the debt while also trying to pay for room and board. Criminal actors use the worker’s mounting debt and fear of local law enforcement as additional means of control. Trafficked workers are sometimes sold and moved between compounds, further increasing their debt,” the report said.

Conclusion

The data in the report is nothing short of impressive. The numbers were high last year and the trend is almost doubling.

The situation is further complicated by another report, which clearly shows that the attackers have no choice, making the whole issue a major ethical dilemma.

One thing is for sure though, for the good of the entire crypto industry, there should be less scams. And part of the responsibility also lies with the users, especially in the desire to be well-informed and aware of the most important Web3 regulations and events.