Cryptocurrency Scams Soar to $5.6 Billion in Losses for Americans

The FBI's latest Cryptocurrency Fraud Report reveals a staggering $5.6 billion in losses reported by Americans due to cryptocurrency scams in 2023. This figure represents a significant increase from the previous year, with older individuals being the primary targets.

• Over 69,000 complaints were filed, many involving cryptocurrency ATMs (bitcoin ATMs).
• People aged 60 and above reported over 16,000 incidents, losing more than $1.6 billion.
• Investment scams, particularly "pig butchering" scams, accounted for nearly $4 billion in losses.

Pig Butchering Scams: The Lucrative Cryptocurrency Fraud

Pig butchering scams, where scammers establish fake relationships and persuade victims to invest in bogus cryptocurrency platforms, were the most prevalent form of cryptocurrency fraud in 2023.

• These scams promise large returns with minimal risk, exploiting the "fear of missing out" mentality.
• The average theft per victim in these scams was nearly $5,000, according to Chainalysis.
• Older adults were targeted due to their potential wealth and unfamiliarity with new technologies like cryptocurrencies.

Bitcoin ATMs: A Gateway for Cryptocurrency Fraud

The report highlights the role of cryptocurrency ATMs (bitcoin ATMs) in facilitating cryptocurrency fraud, particularly among older adults.

• Of the 4,475 victims who reported using a cryptocurrency kiosk, 2,767 were over 60 years old.
• Scammers exploit the ease of use of bitcoin ATMs, often providing QR codes for victims to scan and deposit cash.
• Older individuals may struggle with the complexities of cryptocurrency exchanges, making bitcoin ATMs an attractive target for scammers.

Law Enforcement Efforts and Challenges

While Western law enforcement has made some arrests in connection with cryptocurrency scams, particularly pig butchering operations, the majority of perpetrators remain elusive.

• A UN report found that pig butchering scams are often run by human trafficking victims in Southeast Asia.
• In December 2022, four individuals were arrested by U.S. federal prosecutors for allegedly running an $80 million pig butchering scheme.
• Unreported cases and the global nature of these crimes make it challenging for law enforcement to combat cryptocurrency fraud effectively.

Raising Awareness and Protecting Vulnerable Groups

The report underscores the need for increased awareness and education, particularly for older adults, regarding cryptocurrency scams and the use of bitcoin ATMs.

• Organizations like AARP (American Association of Retired Persons) play a crucial role in supporting fraud victims and raising awareness.
• Familiarity with new technologies and recognition of common scam tactics can help prevent losses.
• Collaborative efforts between law enforcement, regulatory bodies, and the cryptocurrency industry are essential to combat these fraudulent activities effectively.