In an important news update, the Federal Bureau of Investigation (FBI) reported that people lost a massive $5.6 billion to cryptocurrency scams in 2023. This is a 45% jump from the previous year, according to the FBI’s Internet Crime Complaint Center report released on Monday.

FBI Reports Record $5.6 Billion Lost to Crypto Scams 2023

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• Record Losses: According to the FBI, investors lost a staggering $5.6 billion to crypto scams in 2023, a 45% increase from the previous year.
• Investment Fraud: Almost half of the crypto crime reports involved investment scams, which resulted in $4 billion in losses, even though these scams were just 10% of all fraud complaints.
• Human Trafficking: There is a troubling link between crypto scams and human trafficking, with many scammers being victims forced into these operations by gangs in Southeast Asia.

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The report says that the most common and expensive type of crypto crime is investment fraud. Out of more than 69,000 reports, nearly half were about this kind of fraud, resulting in a huge $4 billion loss. Even though crypto scams were only 10% of all fraud reports, they caused almost half of the total financial losses.

Investment fraud scams often trick people by promising significant returns with little risk. The most common scam of the year was called “pig butchering.” This scam involves tricksters who gain trust over time through messaging apps and then convince people to invest in fake cryptocurrency platforms, where they can’t get their money back.

The report also shows that many victims ended up in big debt to cover their losses. Most complaints came from people aged 30-49, but those over 60 lost the most money, with losses of over $1.24 billion last year.

83% of the crypto fraud reports came from American investors. California had the most complaints, totaling 9,522, and the highest money losses, reaching $1.2 billion.

Link to Human Trafficking

A study in 2022 by ProPublica, along with findings from the United Nations, showed a worrying link between crypto scams and human trafficking. Some of the scammers are actually victims themselves, forced into these scams by gangs in Southeast Asia.

The FBI warns people traveling abroad about fake job ads that lead to labor trafficking in scam places overseas. These scams trap people in debt, using threats to make them do the scam work. Some trafficked people are even moved from one place to another, making their debt problems worse.

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