FBI Report Reveals Massive Losses Due To Crypto Scams

The United States experienced a notable surge of 53% in losses linked to cryptocurrency investment scams during 2023, reaching a cumulative sum of $3.94 billion, as indicated by a recent report issued by the Federal Bureau of Investigation (FBI).

According to the FBI Internet Crime Report 2023, the total losses incurred through scams involving cryptocurrencies like Bitcoin, Dogecoin, and Shiba Inu surged to $3.94 billion, representing a 53% rise compared to the 2022 amount of $2.57 billion.

Scams Still Prevalent

The report highlighted a 38% increase in overall investment fraud, amounting to $4.57 billion compared to $3.31 billion previously. A significant portion of these fraudulent activities involved cryptocurrency scams, underscoring the prominent role of digital currencies in online criminal activities.

Fraudsters are increasingly utilizing custodial accounts at financial institutions for cryptocurrency exchanges or third-party payment processors, or they are directing targeted individuals to send funds directly to these platforms, where the funds are quickly dispersed, noted the FBI report.

A Ways To Go

Investment scams dominated internet crime in 2023, constituting over a third of the total losses of $12.5 billion, as per the report. The surge in cryptocurrency scams during 2023 is noteworthy in light of several significant developments. In January, Germany seized over $2 billion in Bitcoin via piracy proceeds, marking the largest seizure of Bitcoins by law enforcement in the country, in collaboration with the FBI.

Around the same time, the United States government announced its plan to sell off $132.5 million in Bitcoin seized in connection with the Silk Road scam investigation. Furthermore, in September, JP Morgan decided to suspend cryptocurrency-related transactions for its clients based in the United Kingdom, indicating the increasing apprehension of financial institutions regarding crypto-related crimes.