The FBI’s latest report highlights the sharp rise in cryptocurrency-related investment fraud, making it the biggest cause of investment losses in the United States in 2023. This financial misdemeanor received attention as it increased by a whopping 53% compared to the previous year. Both investors and regulators.
Most of the investment losses
Surprisingly, cryptocurrency fraud accounted for 86% of all investment fraud losses nationwide in 2023. Total investment fraud losses increased to approximately $4.57 billion, with cryptocurrency-related fraud accounting for approximately $3.94 billion of these losses. The surge from $2.57 billion in 2022 to approximately $3.94 billion in 2023 signals the growing sophistication and scale of cryptocurrency fraud.
The temptation of high profits
FBI findings show that a significant number of victims are involved in cryptocurrency scams due to the lure of high investment returns. Scammers are increasingly using sophisticated schemes, such as romance scams, to fake online identities and defraud victims of their cryptocurrency investments to gain their trust. According to a report by Chainalytic, it is estimated that by 2023, $374 million in stolen cryptocurrencies will be due to romance scams.
The global phenomenon of cryptocurrency fraud
The problem of cryptocurrency-related fraud is not limited to the United States but is a global concern. For example, the Australian Competition and Consumer Commission reported that in 2022, Australians lost more than A$221.3 million to investment scams using cryptocurrencies as a payment method, which is 162.4 more than in 2021. This is a % increase. Cointelegraph also highlighted that more than 324,000 cryptocurrency users worldwide were affected. By 2023, approximately $295 million in digital assets are expected to be stolen due to phishing scams.
The rapid rise in cryptocurrency-related investment fraud highlights the need for heightened vigilance and stronger regulatory measures to prevent investors from falling victim to these sophisticated scams.