Cryptocurrency-Related Frauds and Scams Soar by 45%, FBI Reports

Losses from cryptocurrency-related frauds and scams surged by 45% last year, according to a report from the FBI. The agency highlighted that criminals are increasingly capitalizing on the speed and irreversibility of digital asset transactions to carry out illicit activities.

The FBI’s Internet Crime Complaint Center noted a significant rise in the use of cryptocurrency over the past year. After a downturn in the crypto market in 2022, token prices began to recover last year, which, in turn, drew renewed attention from criminals. One notable example is Bitcoin, whose price more than doubled in 2023.

According to the Internet Crime Complaint Center, less than $5 million was lost to cryptocurrency scams in 2020. However, that figure has since skyrocketed, increasing more than tenfold in just three years.

The FBI attributed this sharp increase to the nature of cryptocurrencies, which eliminate the need for financial intermediaries “to validate and facilitate transactions.” The bureau explained, “Criminals can exploit these characteristics to support illicit activity such as thefts, fraud, and money laundering.”

An additional challenge is that stolen cryptocurrency is often transferred overseas, making it difficult for U.S. law enforcement to navigate anti-money laundering (AML) laws in other jurisdictions.

In total, the FBI received 69,000 complaints from the public in 2023 related to financial fraud involving cryptocurrency. These cases represent only 10% of all financial fraud complaints received by the FBI, but “the losses associated with these complaints account for almost 50% of the total [financial fraud] losses,” the bureau said.

This growing trend signals increasing concern for both law enforcement and individuals as the popularity and complexity of digital currencies continue to evolve.

By fLEXI tEAM