According to an FBI cybercrime report, cryptocurrency investment fraud in the U.S. has increased 53% year-over-year.

The FBI’s Internet Crime Complaint Center (IC3) released its 2023 report, revealing a significant increase in cryptocurrency-related fraud and the use of digital assets in cybercrime.

The 2023 IC3 report provides a comprehensive overview of the current state of internet crime, including the challenges and risks posed by the use of cryptocurrencies for fraudulent activities.

Cryptocurrency investment scam

According to data from the FBI, there has been a notable increase in cryptocurrency-related investment fraud, with losses increasing 53% from $2.57 billion in 2022 to $3.94 billion in 2023.

These scams often lure individuals with promises of high returns on their investments in digital currencies. The report said these scams are becoming increasingly sophisticated, with cybercriminals taking advantage of the growth of the digital asset industry over the past year to lure victims.

This data shows that victims of all ages have been targeted by cryptocurrency investment scams, with complaints particularly concentrated among individuals between the ages of 30 and 60.

The report highlights that it is very important to use security measures such as two-factor or multi-factor authentication to protect against such fraud.

We also emphasize that payment and purchase requests should be confirmed through a secure method other than email communication to mitigate the risk of falling victim to these scams.

Increased use of cryptocurrency in cybercrime

The report also revealed a growing number of incidents where fraudsters are exploiting cryptocurrencies to facilitate the rapid transfer and distribution of stolen funds through Business Email Compromise (BEC) schemes.

BEC scams involve manipulating email accounts to authorize fraudulent transactions, which often result in significant financial losses to victims.

Meanwhile, ransomware attacks that demand payment in cryptocurrency to decrypt data have also increased. The report documents an 18% annual increase in ransomware complaints and a 74% increase in reported losses, reaching a total of $59.6 million in 2023.

The report highlighted that these attacks highlight the ongoing threat from cybercriminals, especially to critical infrastructure sectors.

In response to the surge in cryptocurrency fraud, IC3’s Recovery Asset Team (RAT) has played a pivotal role in mitigating financial losses. RAT has a 71% success rate in freezing fraudulent transfers, securing more than $538.39 million of the reported $758.05 million in losses in 2023.

The report states that as cybercriminals continue to exploit the digital currency environment, the need for heightened vigilance, improved cybersecurity measures, and increased public awareness are becoming paramount. He added that a concerted effort is needed to protect against the evolving threats of the digital age, especially in the rapidly expanding realm of digital assets.