FBI: Crypto Investment Fraud Surged 53% in 2023, Topping $3.94 Billion
The Federal Bureau of Investigation (FBI) has shed light on a worrying increase in cryptocurrency-related investment scams. According to the agency’s findings, the investment losses attributed to such frauds ascended sharply from $2.57 billion in 2022 to about $3.94 billion in 2023, indicating a dramatic 53% rise.
Largest Share of Investment Fraud
This surge in crypto fraud has positioned it as the predominant form of investment scam in the United States, comprising approximately 86% of all investment fraud losses, which totaled $4.57 billion for the year. The FBI stressed the cunning nature of these scams, which allure victims with the prospect of significant returns.
Romance Scams Prey on Victims
Among the most common forms of deception were romance scams. Fraudsters, masquerading under false identities online, foster trust with unsuspecting individuals before persuading them to part with their cryptocurrencies—only to disappear. Blockchain analysis firm Chainalysis highlighted that romance scams alone accounted for suspected thefts worth $374 million in crypto last year.
The Threat of Phishing Scams
Phishing scams also continued to pose a significant risk, duping over 324,000 users into revealing their wallet credentials, which led to approximately $295 million in lost digital assets in 2023. This form of scam typically involves tricking individuals into exposing sensitive information, enabling scammers to deplete their cryptocurrency holdings.
Global Impact
The issue of crypto scam victims extends beyond the United States, with countries worldwide facing similar challenges. The Australian Competition and Consumer Commission disclosed that Australians lost 221.3 million Australian dollars to crypto-based investment scams in 2022, a 162.4% increase from the previous year.
Exploits in Web3
The Web3 space has not been spared from security breaches, with notable exploits leading to significant financial losses. The token for Shido, for example, plummeted 85% following an exploit of its Ethereum-based staking contract. Similarly, the Serenity Shield project suffered a theft that saw around 6.9 million SERSH tokens stolen, resulting in a nearly 99% drop in the token’s value. In total, bad actors have exfiltrated $38.9 million from various Web3 projects in the early months of 2024 alone.
These incidents underscore the critical need for enhanced vigilance and awareness among investors and enthusiasts in the cryptocurrency and Web3 domains. As the landscape of digital assets continues to evolve, so too does the sophistication of scams targeting them, urging a proactive approach to security and investment decisions.
