Cybercriminals have been having a field day by targeting cryptocurrency investors according to the FBI, who said that in the 2023 calendar year some $5.6 billion worth of cryptocurrency was lost due to fraud.
The bureau reported that it received some 69,000 cryptocurrency related complaints on the year amounting to $5.6 billion worth of losses. That figure is up roughly 45% from 2022, which saw just under $4 billion in losses.
“As the use of cryptocurrency in the global financial system continues to grow, criminals are increasingly using cryptocurrency due to its decentralized nature, the speed of irreversible transactions, and the ability to transfer value around the world,” said the FBI.
“Using cryptocurrency also makes it harder for victims to recover stolen funds. Once an individual sends a payment, the recipient owns the cryptocurrency.”
Investment fraud — things like pump and dump or pyramid schemes — was by far the biggest source of losses. The FBI said despite accounting for around 10% of all complaints, investment fraud was responsible for more than 70% of all losses at roughly $3 billion total.
As with most types of fraud, seniors proved to be the most vulnerable age group. People over age 60 managed to lose $1.25 billion worth of crypto on the year. Most complaints were from those in the 30-50 age ranges, but those people managed to suffer lower losses on average than seniors did.
While it was not the biggest source of losses, tech support scams were the second most common complaint received by the FBI. In these scams the cybercriminal contacts the victim claiming to be a support agent and demands currency in exchange for support that is never performed as it was not needed in the first place.
Just behind tech support scams was the traditional identity theft method, in which the attacker uses malware or some other means to access the victim’s cryptocurrency wallet and pilfer their funds. Despite only being the third most common complaint, these scams were the second highest source of losses.
Fourth on the list was extortion, while romance and confidence scams came in a very distant fifth.
