Crypto Scam Losses Up 45%, Says FBI
It is no secret that cryptocurrency has proven to be very profitable over the years. While they were a mostly underground affair years ago, they’ve become some of the best-performing assets of the last decade. As such, investors from all over the world have been seeking our crypto assets to fill their portfolios. As Kane Pepi explains, investors are constantly looking for the best crypto to buy, whether it’s legacy tokens or newer ones.
The downside to this is that scammers have been working to steal investors’ money and sadly, they’re succeeding. A new report from the FBI shows that the amount lost to crypto scams actually increased in 2023 from the previous year.
Crypto Scams on the Rise
The FBI report states that 69,000 complaints were lodged with the Bureau last year related to crypto scams and $5.6 billion in total was lost. While that is a massive figure in itself, it is also 45% higher than the figure reported for 2022. Interestingly, cryptocurrency-related complaints were only 10% of the total amount received by the FBI but digital assets comprise 50% of the amounts lost in total. This would imply that scammers are increasingly looking to receive their payments in crypto.
This is understandable as transactions completed using crypto cannot be reversed and are harder to prosecute. Criminals looking to cover their tracks thus find cryptocurrency a convenient avenue to exploit victims.
People over 60 are especially vulnerable to such scams as they are less likely to understand the inner workings of cryptocurrency. A common tactic used, the FBI noted, was fake investment schemes; these promise high returns if investors put money into a scheme, only for the criminals to run off with their money.
“Over the years, cryptocurrency’s widespread promotion as an investment vehicle, combined with a mindset associated with the “fear of missing out,” has led to opportunities for criminals to target consumers and retail investors—particularly those who seek to profit from investing but are unfamiliar with the technology and the attendant risks,” the report says.
Another notable method of scamming victims is crypto ATMs. As cryptos have become more widely used, ATMs have been popping up in various cities allowing people to buy and sell tokens with ease. Sadly, we’re now seeing a pattern of people being directed to send crypto via ATMs, only to later realize that they have been scammed. The FBI estimates that $189 million has been lost through crypto ATM scams across 5,500 cases.
What’s worse, the Bureau states that money lost through ATMs has a very slim chance of ever being recovered. Other notable findings include the fact that many victims didn’t know they’d been scammed until the FBI approached them. Finally, pig butchering and labour scams were also identified as scam risks.
Conclusion
Scams are, unfortunately, a risk that crypto investors have to navigate as the industry becomes more visible. The stats from the FBI show that the amounts being lost are only increasing, which means that consumers have to protect themselves. Some steps the Bureau has recommended include not downloading suspicious apps, not investing in unregulated business ventures, and reporting any suspicious activity to the authorities.
