Crypto Scams Reach Record $5.6 Billion in 2023, FBI Reports

In 2023, U.S. investors lost a record $5.6 billion to crypto-related fraud, a 45% increase from 2022, according to the FBI. Over 10% of financial fraud cases were crypto-related, with scammers targeting victims through social media and dating apps. Elderly investors reported the highest losses, while new scams like play-to-earn schemes and crypto kiosks contributed to the rising fraud.

The FBI has revealed that a staggering $5.6 billion was lost to crypto-related financial fraud in 2023, marking a 45% increase from the previous year. This data comes from the FBI’s Internet Crime Complaint Center (IC3), which received 69,468 complaints involving cryptocurrency fraud last year. These complaints made up over 10% of all financial fraud reports and accounted for around 50% of the total monetary losses due to fraud.

The report highlights how scammers are increasingly using “confidence-enabled” schemes to defraud victims. These schemes often involve scammers forming relationships over social media or dating apps, convincing their targets to invest in fraudulent crypto platforms, only to have their funds locked up with no possibility of withdrawal.

Victims over the age of 60 suffered the largest losses, totaling more than $1.2 billion, while those in their 30s and 40s were also heavily targeted. The FBI attributes these schemes to the “fear of missing out” mentality, which drives people unfamiliar with cryptocurrency to make high-risk investments.

Emerging Crypto Scams

The report notes a surge in play-to-earn scams, in which users are charged to buy tokens for online games, only to have their wallets frozen once they try to withdraw. Another major concern is the rise of fraudulent businesses claiming to recover lost crypto assets, often preying on individuals already scammed.

Additionally, crypto kiosks, also known as ATMs, have become a growing tool for scammers due to their anonymity. In 2023, 5,500 cases involving fraudulent activity through these kiosks resulted in losses exceeding $189 million. According to the FBI, the chances of recovering funds lost through crypto kiosks are “slim,” given the untraceable nature of these transactions.

Regional Impact

U.S. investors made up 83% of the crypto-related fraud reports filed in 2023, with California leading the nation in both the number of complaints (9,522) and total losses ($1.2 billion).

The report also touched on the global implications of these scams, noting the exploitation of foreign workers who are often lured into labor trafficking situations, working in call centers conducting scams like “pig butchering”—where scammers systematically “fatten up” victims with promises of large returns before cutting them off and stealing their investments.

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