Cryptocurrency Scams Duped Americans out of $5.6B in 2023, FBI Says. Here’s How to Spot Them
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Consumers lost a whopping $5.6 billion in cryptocurrency scams in 2023, according to the FBI’s latest Cryptocurrency Fraud Report.
By far the most prominent kind of scam was investment fraud – which accounted for $3.9 billion of those losses. Investment fraud involves criminals building a rapport with their target over time and convincing them to invest in a low-risk investment opportunity using made-up profits and websites.
These crypto scams try to lure you in by sending you unbelievable digital currency deals you can invest in. The FBI says that these criminals will never meet you in person, and instead rely on text messages, video chats, phone calls and emails. Once you invest in a cryptocurrency venture, it’s very difficult to get your money back.
“The decentralized nature of cryptocurrency, the speed of irreversible transactions, and the ability to transfer value around the world make cryptocurrency an attractive vehicle for criminals, while creating challenges to recover stolen funds,” the report says.
Since 2017, there’s been a drastic increase in cryptocurrency scams. The FBI received just under 5,000 complaints in 2017. By 2022, that number jumped to 50,000. Last year, the agency received 69,000 complaints.
In addition to investment fraud, other forms of cryptocurrency scams detailed in the report included identity theft, extortion and tech support scams.
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If you were the target or victim of a cryptocurrency scam, you can report the incident to the FBI at www.ic3.gov
How to protect yourself from cryptocurrency scams
The best way to avoid falling victim to a cryptocurrency scam is to look for the red flags. Here are some tips to keep in mind to help identify crypto scams, according to the FBI.
Criminals will instill a sense of urgency
You might get a text offering you an exclusive cryptocurrency opportunity, but giving you only a few hours to invest. This approach is not unique to cryptocurrency scams. It’s a popular tactic in utility scams, too, for example. Scammers want you to make rash decisions instead of slowing down to think.
Verify information directly with the company
When contacted by a person claiming to work for a legitimate company, hang up and call the company yourself to verify the legitimacy of the phone call you received. If the company isn’t as well known to you, do your research to vet it. If you find very little online or nothing at all, it’s probably a scam.
Don’t ever pay with cryptocurrency
Some scams may notify you that you’re behind on payment for a bill and need to pay a certain amount in crypto. You can bet these requests are scams. No law enforcement, government official or legitimate company representative will call you and demand payment via cryptocurrency.
Be wary of investment opportunities on social media
Be careful of investment opportunities from strangers or long-lost contacts on social media. Also be cautious about accepting investment advice or opportunities from people you’ve never met in person. It’s easy to create fake social media accounts and websites that look legitimate.
If it sounds too good to be true, it probably is
There’s a reason they’re called ‘get rich quick schemes’. If an investment opportunity sounds too good to be true, it’s likely a scammer trying to get their hands on your money.