The Federal Bureau of Investigation (FBI) has reported that Americans lost $5.6 billion to cryptocurrency fraud in 2023, representing a 45% increase from the previous year with over 69,000 reported cases.
Investment Scams Dominate Fraud Losses
According to the FBI's report, investment scams, particularly those involving Bitcoin and Ethereum, have been the most prevalent, making up around 71% of the total losses. These scams often occur through social media, email, or text message, offering high returns on investment. Scammers build trust and then move communications to encrypted apps like WhatsApp to enhance the legitimacy of their scams.
Emerging Scam Techniques
The report identifies several prominent types of scams contributing to the massive losses: **Call Center Scams:** Representing about 10% of the total losses, these scams include fake tech support and impersonations of government agencies. Scammers use these tactics to deceive individuals into revealing personal information or making financial transfers. **Cryptocurrency Kiosks:** These machines, which allow users to exchange cash for digital currencies, have become a significant vulnerability. Over 5,500 complaints related to crypto kiosks resulted in losses exceeding $189 million.
Connection to Labor Trafficking
The FBI’s report also addresses the connection between crypto fraud and labor trafficking. Many scammers, particularly those operating in 'pig butchering' schemes, are victims of human trafficking forced to participate in fraudulent operations. These victims are often lured by false job advertisements and subsequently targeted by scams claiming to recover lost cryptocurrency.
The FBI urges individuals to exercise extreme caution when presented with investment opportunities from unknown sources. In response to the surge in fraud, new methods such as the ’ZERO-KYC mechanism’ have been proposed to counter P2P crypto scams.
Comments