In its recently published report, the United States Federal Bureau of Investigation (FBI) Internet Crime Complaint Center has revealed that investors lost a historic $5.6 billion to crypto-related financial fraud in 2023, up 45% from 2022.

Over 10% Of Financial Fraud Cases Are Crypto-Related

$5.6 billion. That’s the amount of money the FBI estimated was lost by Americans victimized by crypto frauds last year.

In a report on Monday, the agency said it received a whopping 69,468 complaints involving crypto in 2023, making up over 10% of total financial fraud complaints and around 50% of the total losses.

Americans lost $5.6 billion in crypto scams in 2023—and accounted for 50% of total losses from financial fraud—according to a new report published Monday by the FBIhttps://t.co/m1XwafLjCE pic.twitter.com/wDFD9gv9li

— Leo Schwartz (@leomschwartz) September 9, 2024

Investors over the age of 60 reported the most losses last year—over $1.2 billion—followed by victims in their 30s and 40s. According to the FBI, investment fraud schemes were the most reported crime. The most common type of crypto-related investment fraud was what the agency framed as “confidence-enabled” schemes.

With this type of investment fraud, scammers form relationships with their victims over long periods, typically via dating and social media apps, before convincing them to invest large amounts of money in shady crypto platforms that they cannot withdraw from.

“Over the years, cryptocurrency’s widespread promotion as an investment vehicle, combined with a mindset associated with the ‘fear of missing out’, has led to opportunities for criminals to target consumers and retail investors — particularly those who seek to profit from investing but are unfamiliar with the technology and the attendant risks,” the FBI wrote.

Play-To-Earn Scams And Crypto Kiosks

Although the FBI’s criminal investigative division took complaints from over 200 countries, U.S. investors accounted for 83% of all the crypto-related fraud reports it received in 2023, with California taking the lion’s share for both the number of complaints (9,522) and collective losses ($1.2 billion).

The report also emphasized the risk of labor trafficking, where workers are lured into taking exploitative positions abroad, often in call centers operating “pig butchering” scams.

Other fraudulent activities threatening Americans include play-to-earn scams that charge users to buy tokens for an online game and then freeze the user’s wallet. Businesses falsely claiming to recover lost crypto assets may also victimize customers.

Moreover, using crypto ATMs (kiosks) to “perpetrate fraudulent activity” is increasing, with 5,500 cases resulting in losses transcending $189 million. These machines are the go-to for most scammers due to the anonymity of transactions.

The deputy assistant director of the FBI’s Internet Crime Complaint Center, James Barnacle, remarked that chances of retrieving funds lost through crypto kiosks are “slim.”