Losses from cryptocurrency-related scams soared 45% in 2023, reaching over $5.6 billion, as digital assets like Bitcoin and Ether gained popularity. According to a report by the FBI’s Internet Crime Complaint Center, criminals have increasingly exploited the speed and irreversibility of cryptocurrency transactions for illicit activities such as fraud and money laundering.

Key Drivers Behind the Surge

The rise in cryptocurrency scams has coincided with the growing adoption of digital assets, driven by price surges and the introduction of exchange-traded funds (ETFs) tracking crypto prices. While blockchain technology allows for transparency, enabling law enforcement to trace transactions, criminals quickly move funds overseas, often into jurisdictions with lax anti-money laundering (AML) laws, creating significant challenges for U.S. authorities.

Breakdown of Losses

Investment scams accounted for 71% of all crypto-related losses in 2023, underscoring how fraudsters have targeted investors eager to capitalize on the rising value of cryptocurrencies. Other scams, including call center fraud and government impersonation schemes, made up 10% of the reported losses.

Impact on Older Populations

The report also highlighted the vulnerability of older Americans to crypto-related fraud. Individuals over 60 suffered the most significant financial impact, with losses from this group surpassing $1.6 billion.

FBI’s Statement on Crypto Crime

The FBI emphasized how the decentralized nature of cryptocurrency transactions makes them an attractive target for criminals. “Since cryptocurrencies eliminate the need for financial intermediaries to validate and facilitate transactions, criminals can exploit these characteristics to support illicit activity such as thefts, fraud, and money laundering,” the agency said.

Conclusion

As the popularity of cryptocurrencies continues to grow, so does their misuse by criminal actors. The increase in crypto scams highlights the need for stronger regulations and cross-border cooperation to combat fraud and protect investors.