The US Federal Bureau of Investigation (FBI) published a report according to which 2023 was a record year for the number of cases of cryptocurrency fraud, as well as for the volume of losses. In total, nearly 70,000 reports to the Internet Crime Complaint Center (IC3) indicate losses of more than $5.6 billion, up 45% from the previous year.
Image source: Copilot
According to BleepingComputer, the main reason for the increase in losses was investment fraud, which accounted for 71% of the total cryptocurrency losses. Fraudsters have used a variety of schemes, including the Big Butchering scheme, in which victims are lured to fake investment platforms through dating apps and professional social networks. Liquidity mining scams also turned out to be widespread, when investors were promised ultra-high returns for placing assets in a pool.
In addition to investment schemes, other methods of deception were also actively used. These include fraud using call centers, impersonating government officials or technical support. The attackers also created fake gaming applications supposedly based on blockchain technology, promising players rewards in cryptocurrency while simply gaining access to their wallets.
Most of the losses ($4.8 billion) occurred among US citizens. Next on the list of affected countries are the Cayman Islands ($196 million), Mexico ($127 million), Canada ($72 million), Great Britain ($59 million), India ($44 million) and Australia ($25 million). Within the US, California suffered the most, recording losses of $1.155 billion, followed by Texas ($412 million), Florida ($390 million) and New York ($317 million).
Graph of recorded cryptocurrency losses. Image source: FBI
The IC3 report explains that cybercriminals target cryptocurrency due to its decentralized nature and the existence of mechanisms that help hide traces of money transfers, as well as the technical impossibility of affected users canceling their transactions. The FBI urges people to be vigilant and “be skeptical of investment promises that seem too good to be true.” The agency also recommends checking the legitimacy of investment platforms before investing, and trying to use independent cryptocurrency wallets for games and investments.