The Internet Crime Complaint Center of the United States Federal Bureau of Investigation (FBI) revealed in its 2023 report, that Americans lost an alarming $5.6 billion to cryptocurrency fraud, marking a 45% rise from the previous year. It highlighted that the crypto-related fraud accounted for 10% of total complaints received, while representing nearly 50% of the total losses.
The report unraveled another concerning aspect – the most vulnerable victims were people aged 60 and above, who fell prey to nearly $1.6 billion in losses from the reported 69,000 crypto-related complaints. It drew attention to the fact that 71% of these frauds were connected to investment schemes while about 10% were tied to call center fraud and government impersonation scams.
The FBI also noted that the majority of the losses were due to confidence schemes. It cautioned the public to be wary of investment opportunities proposed by strangers whom they have never met in person. Other fraudulent avenues included labor trafficking where workers were lured into overseas positions, such as at call centers, which turned out to be exploitative.
Furthermore, the United States citizens face threats from play-to-earn scams where they are charged for purchasing tokens for an online game, only to have their wallets frozen later. Vigilance was also suggested with businesses claiming to recover lost cryptocurrencies.
The report also identified crypto kiosks or ATM-like facilities as high-risk platforms for scams. The FBI recorded 5,500 cases involving such kiosks, leading to losses of over $189 million. The anonymity of ATM transactions made them preferred choice for scammers.
James Barnacle, Deputy Assistant Director of the FBI Criminal Investigative Division, pointed out how difficult it is to recover lost funds through a crypto kiosk, describing the chances as ‘slim’. Lastly, he revealed that most victims (75% of the 3,000 people notified by the FBI) were largely unaware that they had been defrauded.