The FBI released a report stating that Americans fell victim to cryptocurrency fraud schemes amounting to over $5.6 billion last year.
Cryptocurrency fraud schemes increased greatly with the new report, up 45% from 2022.
Driving the news: In 2023, nearly 70,000 complaints were received by the FBI from individuals who were defrauded in financial scams involving cryptocurrencies like bitcoin and ether.
- The most common scheme reported was investment fraud, responsible for approximately $3.96 billion of the total losses.
Zoom in: Scammers often establish contact through dating apps or social media platforms, gradually building trust with potential victims over weeks or months before proposing cryptocurrency investments.
- They then persuade victims to use fraudulent websites or apps for investing, sometimes allowing small withdrawal amounts initially to appear authentic.
- Victims may also be approached by illegitimate entities promising to help them reclaim lost cryptocurrency, further victimizing them in what appears to be a follow-up scam, as per the FBI’s findings.
What they’re saying: “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 FBI said in a statement.
