According to the FBI’s first annual Cryptocurrency Fraud Report, cryptocurrency scams in the U.S. cost people $5.6 billion in 2023.
Over 69,000 complaints were filed, primarily affecting older adults – especially those over 60 years old. With over 16,000 cases and $1.6 billion lost, most scams were linked to fraudulent investment schemes, particularly “pig butchering” scams, where scammers pose as romantic partners or trusted friends, persuading victims to invest in fake cryptocurrency platforms.
Scammers frequently used cryptocurrency kiosks (ATMs) to deceive victims, with the FBI noting that 2,676 out of 4,475 kiosk-related scams involved older individuals. The majority of the $5.6 billion in losses stemmed from investment fraud, which increased 53% from 2022.
Charts depict the amount of Cryptocurrency complaints reported to the IC3 from 2017 – 2023
In one of the largest crypto scam cases last year, four men were arrested for defrauding $80 million in a pig butchering scheme.
Why It Matters: As cryptocurrency becomes more embedded in corporate financial systems, CIOs need to be vigilant about the security risks tied to digital assets. The rising scale and sophistication of cryptocurrency scams raise the need for stronger cybersecurity frameworks, employee training, and fraud detection mechanisms to safeguard businesses against potential fraud-related vulnerabilities.
- Strengthen Fraud Detection Systems: To strengthen fraud detection systems, it is recommended that organizations implement advanced tools capable of identifying suspicious cryptocurrency transactions, especially those involving unfamiliar or high-risk platforms, and ensure that monitoring systems are integrated with financial systems to flag unusual activity.
- Age Demographics in Cybercrime: People aged 60 and over suffered the most, reporting $1.6 billion in losses. This suggests a need for stronger fraud prevention strategies aimed at protecting less tech-savvy employees and customers.
- Use of Crypto ATMs in Scams: Cryptocurrency kiosks were a common tool used by scammers, highlighting the importance of technology leaders securing any touchpoints involving cryptocurrency or digital assets at their organizations to prevent fraudulent activity.
- Cybercrime Exposure: The FBI report emphasizes the difficulty of prosecuting cryptocurrency scammers due to their international reach, underscoring the importance of proactively managing and mitigating fraud risks, especially when dealing with international transactions or adopting crypto technologies.
