In 2023, crypto scams resulted in a staggering $5.6 billion in losses for people across the United States, with older adults bearing the brunt of these frauds, according to an FBI report. The report, released last week, highlighted that more than 69,000 individuals reported falling victim to scams involving digital currencies, often facilitated through easily accessible cryptocurrency ATMs.
A significant portion of the complaints came from individuals aged 60 years of age and older. More than 16,000 complaints were filed by this group, reporting a combined loss of more than $1.6 billion — far surpassing any other age category. In contrast, those below the age of 20 submitted the fewest complaints, with 858 cases amounting to nearly $15 million in losses.
The scams varied widely, with schemes ranging from extortion and fake tech support to fraudsters impersonating public servants. However, the largest chunk of reported losses — close to $4 billion — stemmed from investment scams. In these scams, criminals adopt fake identities and spend months building a close relationship with the victim, either romantic or friendly. Once trust is established, they persuade the victim to invest increasingly large sums into a fraudulent crypto platform.
“These scams promise high returns with minimal risk,” the FBI’s report states. The agency explained that crypto’s promotion as a lucrative investment, coupled with the public’s fear of missing out, has created a fertile environment for criminals. These individuals specifically target people who are unfamiliar with cryptocurrency and the risks that come with it. A representative from Chainalysis, a company that tracks cryptocurrency transactions, stated that these types of scams were the most profitable type of cybercrime in 2023, with each victim losing an average of nearly $5,000.
The FBI’s report also revealed that a large number of victims, particularly those 60 years of age and older, were tricked into using crypto kiosks or Bitcoin ATMs as part of the scam. Of the 4,475 cases involving crypto kiosks, more than half — 2,676 — were individuals over the age of 60.
These kiosks, which allow users to exchange cash for Bitcoin or other cryptocurrencies, can be exploited by scammers who guide victims through the process of sending money. Criminals often send a QR code for victims to scan and instruct them to deposit cash into the machine.
Although scams of this nature are difficult to prosecute, law enforcement occasionally makes arrests. A report by the United Nations showed that although many of these activities are managed by victims of human trafficking in southeast Asia, the United States did make some headway in this area last year. Four people were detained by federal authorities in December for an $80 million scam.
Exchanges such as Coinbase Global Inc. (NASDAQ: COIN) now need to take on even more responsibility in raising awareness among their users and clients so that the toll taken by scammers can be minimized.
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