The year 2023 saw cryptocurrency-related investment fraud take center stage in the United States, according to a report from the Federal Bureau of Investigation (FBI). The report revealed that losses stemming from crypto investments surged from $2.57 billion in 2022 to approximately $3.94 billion in 2023, representing a significant increase of 53%.
To put this in perspective, the total amount lost in investment fraud for the year amounted to $4.57 billion. This means that the losses incurred from crypto-related scams accounted for around 86% of all investment fraud losses in the country.
The FBI highlighted that a growing number of victims are falling prey to crypto scams, lured by the promise of substantial returns on their investments. Among the most prevalent scams is the romance scam, where criminals assume fake online identities to earn the affection and trust of their victims. They then concoct elaborate stories to convince victims to send cryptocurrency, only to vanish into thin air afterward.
In December 2023, Chainalysis reported that romance scams were responsible for at least $374 million in suspected stolen cryptocurrency during the year.
In addition to romance scams, phishing scams also targeted crypto users in 2023. Cointelegraph reported that over 324,000 crypto users fell victim to phishing scams, resulting in a loss of approximately $295 million in digital assets.
It is important to note that the rise in crypto scams is not limited to the United States. Other countries around the world are facing similar issues. The Australian Competition and Consumer Commission (ACCC) reported in April 2023 that Australians lost 221.3 million Australian dollars ($146.9 million) to investment scams involving crypto as the payment method in 2022. This marked a staggering 162.4% increase from the previous year.
In other news, the owner of a valuable CryptoPunk Seedphrase recently partnered with Sotheby’s, a renowned auction house, highlighting the growing interest in non-fungible tokens (NFTs) and their collectibility.