Americans Lose $5.6 Billion to Cryptocurrency Fraud in 2023, FBI Reports

Jimmy Aki
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A recent report by the U.S. Federal Bureau of Investigation (FBI) shows that Americans lost $5.6 billion to cryptocurrency fraud in 2023. This highlights the increasing threat that crypto scams pose to unsuspecting users and the market.

Elderly Are the Most Targeted

The FBI’s Internet Crime Complaint Center reported that the $5.6 billion lost to crypto scams marked a 45% increase from 2022.

The number of crypto-related complaints made up 10% of all reports received by the law enforcement agency, but almost 50% of the total financial losses that year came from crypto fraud.

In 2023, the FBI received around 69,000 complaints related to cryptocurrency fraud. The elderly were the most vulnerable, with individuals above 60 accounting for a significant portion of the losses, totaling about $1.6 billion.

This trend shows the growing concern that scammers more frequently target elderly individuals.

Investment schemes made up 71% of the total cryptocurrency fraud cases, while call center fraud and government impersonation scams also played a role, with about 10% of cases involving these schemes.

The FBI noted that most of the losses occurred in the United States, although complaints came from over 200 countries. The law enforcement agency cited confidence schemes as the leading cause of the losses, where victims are tricked into trusting the scammers.

Crypto ATMs and Other Fraudulent Activities

Cryptocurrency ATMs, often called kiosks, have become a hotspot for scammers. In 2023, there were 5,500 recorded cases involving ATMs, leading to over $189 million in losses. But $65 million in losses were recorded as of the first half of 2024, even as the total loss in the year has been projected to surpass 2023.

Scammers prefer these ATMs because of the anonymity they provide. The FBI reported that the transactions were linked to various scams, including extortion, government impersonation, and romance scams. Due to the anonymity of ATM transactions, recovering money lost through these machines is extremely difficult.

Pig butchering scams, where workers are lured into fraudulent overseas jobs, often involving call centers, are another growing concern. In these schemes, individuals are exploited by employers, with passports or identification documents seized.

In an interview, Deputy Assistant Director of the FBI Criminal Investigative Division, James Barnacle, said that the chances of recovering funds lost through crypto kiosks are slim.

He added that the FBI frequently notifies individuals when they discover they have been victims of fraud. However, of the 3,000 people informed in 2023, 75% were unaware they had been defrauded.

With the continued growth of the crypto industry, the FBI is urging citizens to stay informed and take precautions to protect their finances. As scammers adapt to new technologies, individuals must remain vigilant to avoid falling victim to these costly fraud schemes.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.