Record $5.6 Billion Lost to Crypto Scams in 2023: FBI Report

In 2023, the FBI reported a record loss of $5.6 billion due to cryptocurrency-related fraud. This marks a 45% increase over 2022, signaling a dramatic rise in both the volume and complexity of scams targeting crypto investors. Major scams include fraudulent investment schemes and human trafficking operations, exploiting vulnerable investors and deceiving them through complex techniques such as social engineering and Bitcoin ATMs. The FBI stresses the importance of public awareness and reporting scams on IC3 to combat this growing trend.

In 2023, the FBI reported a record $5.6 billion loss due to cryptocurrency scams, a 45% increase from the previous year. The rise in fraud cases includes scams involving Bitcoin ATMs, human trafficking, and fake investment platforms. The FBI urges the public to report scams via the IC3 to help prevent further losses. These scams have grown in complexity, affecting investors of all experience levels.

• Defendant: No specific individual defendants are named, but the scams involve a network of fraudsters, including organized crime groups.
• Crime: Fraudulent cryptocurrency investment schemes and human trafficking-related scams.
• Amount Defrauded: $5.6 billion in 2023.
• Method: A variety of methods were used, including scams leveraging social engineering, Bitcoin ATMs, and fake investment platforms.
• Sentence: Investigations are ongoing, with multiple law enforcement agencies, including the FBI, tracking the fraudsters.
• Additional Penalties: No penalties are listed, but the FBI is closely monitoring the situation and encourages the public to report scams.
• Investigating Agencies: The FBI and the FBI’s Internet Crime Complaint Center (IC3).
• Prosecutor's Statement: The FBI emphasizes the increasing complexity and severity of crypto crimes and stresses the importance of public reporting.

The FBI's report covers the period from January to December 2023, during which crypto fraud cases surged by 45%. Human trafficking and scams targeting senior citizens and inexperienced crypto users were prominent during this time. Organized crime rings expanded their operations, exploiting vulnerabilities in Bitcoin ATMs and scamming investors out of billions.

In 2023, the FBI reported a record-breaking $5.6 billion loss due to cryptocurrency-related fraud, representing a 45% increase over 2022. The scams primarily targeted inexperienced crypto investors and exploited new technologies, such as Bitcoin ATMs and social media. Among the most significant threats were fraudulent investment platforms and human trafficking-related schemes that defrauded individuals by offering fake returns or exploiting them in illegal operations. The FBI’s Internet Crime Complaint Center (IC3) is spearheading efforts to gather reports and track these crimes. With the growing complexity and sophistication of the scams, law enforcement agencies are urging the public to report suspicious activities to help mitigate future losses.

Using a hardware wallet could have prevented or minimized some losses by securing private keys offline, away from scam-related platforms and exchanges. Here are three wallets that could have helped protect users:

1. Ledger Nano X: Offers Bluetooth connectivity, making it easy to use while maintaining offline storage of private keys, ensuring assets are kept secure and inaccessible to online scammers.
2. Trezor Model T: With an intuitive touchscreen and robust security features, this wallet prevents phishing and malicious attacks by requiring physical confirmation of transactions.
3. Ellipal Titan: Known for its air-gapped security, this wallet ensures that no online connection is ever established, eliminating the risk of online hacking or phishing scams.

Preventative Steps:

• Always verify the authenticity of investment platforms.
• Report suspicious activities to the FBI’s IC3 (Internet Crime Complaint Center).
• Avoid Bitcoin ATMs unless they are from trusted and verifiable sources.