Investment fraud in the United States hit an all-time high in 2023, with losses skyrocketing to $4.57 billion, with cryptocurrency-related scams emerging as the primary driver. According to U.S. Federal Bureau of Investigation’s latest annual report, crypto was involved in a record 87% of all losses and totaled $3.96 billion.
AThat represents a dramatic increase from $3.3 billion in 2022 and a staggering 18 times increase from $253 million lost in 2018, according to the FBI. The law enforcement agency compiles data from reports submitted to its Internet Crime Complaint Center, often abbreviated as IC3.
The new report reveals that the number of investment fraud victims in 2023 was 11 times higher than five years ago, with complaints rising from 3,693 in 2018 to 39,570 last year. The average loss per victim reached $115,499, up from $68,496 in 2018.
Millennials were the most frequently targeted age group for investment fraud, followed closely by Gen X. About two-thirds of investment fraud victims were between 30 and 50 years old, while 13% were in their 20s or younger, and 22% were 60 and older.
But already this year, the FBI has flagged that North Korean hackers appear to be targeting Bitcoin ETF issuers in the U.S. The agency said last week that the would-be hackers are employing "difficult-to-detect social engineering campaigns" against those working in the crypto sector, including those in the decentralized finance (DeFi) and ETF space.
The 2023 report also put the spotlight on a particularly deceptive form of crypto fraud commonly referred to as “pig butchering.” In these scams, fraudsters establish fake romantic relationships with targets—usually through online dating platforms or social media. Once they’ve won their target’s trust, the scammer convince them to invest in fraudulent cryptocurrency schemes.
"Crypto scams are particularly appealing to fraudsters because transfers are irreversible, payments are not protected by the government and there is no central authority or bank to flag suspicious activity,” the FBI wrote in its report.
The geographic distribution of investment fraud varies across the United States.
California residents suffered the highest collective losses at $984 million in 2023, while Maryland had the highest rate of investment fraud at 14.4 victims per 100,000 residents.
To protect against crypto and other investment scams, the report recommends thorough research, skepticism towards high-pressure tactics, and consultation with licensed financial advisors. It also advises verifying investment opportunities with official sources and understanding the associated risks before committing funds.
Edited by Stacy Elliott.