FBI warns of exploding crypto investment fraud

Crypto-currency scams hit record levels in the US in 2023, accounting for 86% of total investment fraud losses, according to an FBI report. Authorities warn of increasingly sophisticated scam techniques.

Soaring growth in crypto scams

Figures published by Federal Bureau of Investigation (FBI) are alarming. The year is 2023, investment fraud involving cryptos jumped 53%. year-on-year, reaching $3.94 billion. This amount alone represents 86% of total investment fraud losses in the U.S. over the same period.

The report points out that scammers lure their victims with promises of glittering returns on investment. Taking advantage of the cryptocurrency craze and the unfamiliarity of many investors, they are deploying increasingly elaborate techniques to extract funds.

Some of the most widespread scams include romance scams. Criminals create fake online identities to gain the trust of their targets, before inventing a story to persuade them to send cryptocurrencies.

Once the funds have been transferred, they disappear into thin air. In December 2023 alone, this type of scam is said to have stolen the equivalent of $374 million in crypto-currencies, according to Chainalysis.

A global problem that goes beyond American borders

The problem is far from confined to the USA. All over the world, we’re seeing a worrying upsurge in crypto-related scams.

Australia is a striking example. Between 2021 and 2022, losses linked to investment scams using cryptos as a means of payment jumped 162.4% there to $146.9 millions. The Australian Competition and Consumer Commission is alarmed by this explosion in fraud.

Beyond investment scams, the crypto wallet piracy has become a real scourge. In 2023, over 324,000 users fell victim to phishing attacks, resulting in the loss of $295 million in digital assets.

Authorities around the world are stepping up their efforts to raise public awareness of the risks and track down criminals. But this is no easy task in the face of criminals who often operate from abroad, taking advantage of the anonymity offered by cryptocurrencies.

The surge in crypto scams highlighted by the FBI is a wake-up call that needs to be taken very seriously. Beyond the numbers, the credibility and maturity of the crypto ecosystem is at stake.

Stemming this scourge must become a major priority, and that means mobilizing all players: regulators, exchange platforms, investors, on-chain investigators such as Raid Square in Europe… Enhanced international cooperation is also essential to effectively track down these borderless criminals.