Cryptocurrency-related fraud losses surged 45% to US$5.6b in 2023: FBI

Cryptocurrencies such as Bitcoin and Ether have become more popular as token prices have soared to new highs and as exchange-traded funds tracking their prices have hit the US market this year.

Cryptocurrency-related frauds and scams resulted in losses of more than US$5.6 billion in 2023, up 45 per cent from the previous year, as scammers exploited the speed and irreversibility of digital asset transactions, the US Federal Bureau of Investigation (FBI) said on Monday (Sep 9).

The losses, which were reported to the FBI’s Internet Crime Complaint Center, come as cryptocurrencies such as Bitcoin and Ether have gained in popularity, with token prices hitting new highs and exchange-traded funds tracking their prices hitting the US market this year.

However, that growth has also led to increased use of cryptocurrency by criminal actors, the FBI said in a new report.

While crypto transactions are recorded on publicly available blockchains, allowing law enforcement to easily trace funds, money is often transferred quickly overseas, where US officials can encounter obstacles such as lax anti-money laundering laws in certain jurisdictions, the FBI said.

In particular, losses from investment scams with a nexus to cryptocurrency accounted for 71 per cent of all crypto-related losses last year, the report said. Call centre scams and government impersonation scams accounted for 10 per cent of losses.

The FBI received the most complaints referencing cryptocurrency from people over the age of 60, with losses from that group amounting to more than US$1.6 billion.

“Since cryptocurrencies eliminate the need for financial intermediaries to validate and facilitate transactions, criminals can exploit these characteristics to support illicit activity such as thefts, fraud, and money laundering,” the FBI said.

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