FBI: Crypto Investment Scams Will Reach $3.94 Billion in 2023
2 min read on FBI’s Cryptocurrency-related Investment Fraud Report
The Federal Bureau of Investigation (FBI) has reported an increase in losses due to cryptocurrency-related investment fraud. According to a recent report by the FBI, cryptocurrency-related investment losses rose from $2.57 billion in 2022 to approximately $3.94 billion in 2023, a staggering increase of 53%.
These losses accounted for the majority of investment fraud in the country, accounting for approximately 86% of total investment fraud losses, which amounted to $4.57 billion during the year. The FBI pointed out the alarming trend of victims falling prey to crypto scams, lured by the promise of a significant return on their investments.
Romance scams continue to claim victims
One of the most common types of crypto scams that victimize individuals is romance scams. In this plan, criminals assume fake online identities and build trust with victims before convincing them to send cryptocurrencies and then disappear again. Chainalysis, a blockchain analytics firm, reported that romance scams alone were responsible for at least $374 million worth of suspected stolen cryptocurrencies in 2023. Phishing scams also posed a significant threat to crypto users. In 2023, over 324,000 people will fall victim to such scams, resulting in the loss of approximately $295 million in digital assets. These scams typically trick users into revealing their wallet credentials, which allows scammers to siphon their money.
It is important to note that the rise in crypto scam victims is not just limited to the United States. Countries around the world are struggling with similar problems. In April 2023, the Australian Competition and Consumer Commission announced that Australians had lost 221.3 million Australian dollars (US$146.9 million) to investment scams using crypto as a payment method in 2022, a staggering increase of 162.4% compared to 2021.
The rise in crypto investment scams highlights the need for greater awareness and caution among investors and crypto enthusiasts.
Exploits continue to be widespread on Web3
Last month, Layer 1 blockchain token Shido crashed 85% after the project’s Ethereum-based staking contract fell victim to an exploit. The exploit against Shido came just a day after the Serenity Shield project, a multi-chain data storage startup fell victim to a theft involving its MetaMask wallet which had been compromised. The hack, which took place on one of the Serenity wallets on BSC, allowed the perpetrators to steal around 6.9 million native SERSH tokens worth $5.6 million at the time of the hack. The exploit took a toll on the price of the native token, pushing SERSH from $0.565 to $0.009, a drop of almost 99%.
Criminals reportedly stole $38.9 million from various Web3 projects in the first month of 2024. One of the first major crypto hacks of the year occurred when Radiant Capital suffered a $4.5 million loss due to a blank market exploit. Gamma Strategies, another affected platform, fell victim to a flash loan attack on January 4th, shortly after the incident with Radiant Capital. The attack exploited a code flaw that allowed the hackers to withdraw $6.1 million from Gamma’s publicly accessible vaults.
