The FBI has issued a warning regarding a rise in cryptocurrency investment scams, reporting a 53 percent increase over the past year.
In 2023, investment scams involving cryptocurrencies amounted to $3.94 billion (approximately Rs. 32,592 crore), marking a significant increase.
The Federal Bureau of Investigation (FBI) in the US reported a notable increase in cryptocurrency investment scams during 2023. According to the recently published ‘Internet Crime Report 2023’, the FBI stated that crypto investment scams surged by 53 percent compared to the previous year. In these scams, perpetrators provide fraudulent cryptocurrency investment advice to individuals, persuading them to invest in fake tokens that ultimately funnel all funds back to the scammers. These schemes lure victims with promises of high returns on their investments. Typically, scammers utilize social media platforms such as LinkedIn, Twitter, and Facebook to target potential victims.
According to the FBI’s report, investment scams involving cryptocurrencies surged from $2.57 billion in 2022 to $3.94 billion in 2023, representing a 53 percent increase. The majority of victims, aged between 30 and 49 years, fell prey to these scams. Additionally, the elderly were particularly vulnerable to tech support scams. In comparison to 2022, the FBI received 880,400 financial scam complaints in the past year, with losses totaling nearly $12.5 billion. This marks a 10 percent increase in the number of complaints and a 22 percent increase in the amount stolen compared to 2022.
According to FBI data, Canada and India reported 6,601 and 3,405 complaints, respectively, of similar financial crimes in 2023, following the United States. As the crypto market approaches its previous all-time high capitalization of $3 trillion, cybercriminals are increasingly targeting members of the crypto community with scams.
While the FBI has raised concerns about the growing number of such incidents since last year, market research platform Scam Sniffer has also flagged the scam status of the crypto sector for 2024. According to its data, approximately 57,000 victims lost around $47 million to crypto phishing scams in February this year.
In the majority of crypto scam instances, the pilfered funds are typically transferred directly into custodial accounts linked to crypto platforms. Frequently, third-party payment processors are employed to facilitate these transactions. Emphasizing this, the FBI has advised all participants in the crypto investment community to activate two-factor authentication (2-FA) to prevent unauthorized movement of their funds to other accounts.
