The FBI has highlighted a significant uptick in cryptocurrency fraud, marking a worrying trend for investors. The agency’s findings show an alarming 53% jump in crypto-related investment fraud, accounting for an overwhelming 86% of total investment fraud losses in the nation last year.
Investors faced losses totaling nearly $3.94 billion to fraudulent crypto ventures in 2023, a stark rise from the previous year’s $2.57 billion. This surge is part of a broader pattern, with overall investment fraud losses reaching $4.57 billion.
Authorities warn that scammers are increasingly exploiting the allure of high returns to bait investors. Among the most prevalent schemes is the romance scam, where fraudsters craft false identities to build trust and eventually coax victims into sending cryptocurrency.
Data from Chainalysis underscores the severity of the situation, with romance scams alone leading to suspected thefts of around $374 million in crypto last year. Additionally, Cointelegraph reports a staggering 324,000 individuals were ensnared by phishing attacks, resulting in losses of about $295 million.
This issue transcends borders, with the Australian Competition and Consumer Commission reporting a 162.4% surge in losses to investment scams involving crypto in 2022.
Investors are urged to exercise due diligence and skepticism, especially when faced with promises of outsized returns, to protect themselves from falling prey to these sophisticated and costly scams.
