Investors lost a record $5.6 billion to crypto-related financial crime in 2023, up 45% from 2022, according to a new report from the Federal Bureau of Investigation’s (FBI) Internet Crime Complaint Center.
According to the report published Monday, investment fraud was the most pervasive – and expensive – type of crypto-related fraud in 2023. Of the more than 69,000 reports of crypto-related crime the agency received last year, nearly half were reports of investment fraud, and investment fraudsters made off with a whopping $4 billion. And while crypto crimes only made up about 10% of the complaints the FBI received, the $5.6 billion figure was roughly half the overall loss by complainants.
Investment fraud schemes typically promise their victims the opportunity to make large returns with minimal risk, and have been on the rise in recent years. Last year, the most prominent type of crypto-related investment fraud was what the FBI described as “confidence-enabled” schemes. Sometimes called “pig butchering,” this type of investment fraud takes place over long periods of time as scammers form relationships with their victims, usually over messaging apps, before encouraging them to invest huge amounts of money in fraudulent cryptocurrency platforms that they are unable to withdraw from.
According to the FBI’s report, many victims of these pig butchering or investment scams have “accumulated massive debt to cover losses from these fraudulent investments.” While victims between the ages of 30-49 filed the most complaints related to investment scams, victims over the age of 60 reported the most losses – over $1.24 billion last year alone.
Though the IC3 takes complaints from U.S. citizens and foreigners alike, American investors accounted for 83% of all the crypto-related fraud reports it received last year, with California residents holding the top spot for both number of complaints (9,522) and amount of losses ($1.2 billion).