Cryptocurrency investment fraud in the U.S. was up almost 3x year-over-year in 2022 — making investment fraud the “costliest scheme reported,” according to the FBI’s 2022 internet crime report.
Crypto fraud up 183%
Crypto investment fraud hit a record $2.57 billion in 2022, compared to $907 million in 2021 — a 183% increase on an annual basis.
Crypto investment fraud losses made up roughly 25% of all money lost to online scams and fraud during 2022 and almost 90% of the $3.31 billion lost to online investment fraud.
Overall, Americans lost a total of $10.3 billion to online scams during the year, versus $6.9 billion in 2021.
The FBI began gathering data on online scams in 2000 through its internet crime complaint center (IC3) and the $10.3 billion lost in 2022 is the highest amount ever stolen by online scammers and fraudsters.
Similarly, crypto-based fraud also hit record numbers during the year, with a vast majority of the complaints tagged with the “cryptocurrency wallet” descriptor. According to the report:
“Crypto-investment scams saw unprecedented increases in the number of victims and the dollar losses to these investors.”
Investment fraud breakdown
Bad actors used a variety of ways to target and scam their victims, according to the FBI.
Some scammers offered victims access to fake liquidity mining platforms. Once victims connected their cryptocurrency wallets to said platform, the scammers would wipe out their funds without notice or notification.
Some scammers used hacked social media profiles to offer fake investment offers to the profile’s friends and family, while others used fake celebrity profiles to shill similar schemes.
Crypto investment frauds were not limited to online schemes, and some scammers used fake real estate investment opportunities to steal people’s cryptocurrency. Fake employment opportunities were also used to scam people.
The vast majority of victims in investment frauds were aged between 30 and 49, while roughly 30% of the victims were aged 60 and above, according to the report.
Meanwhile, the FBI said scammers are becoming more sophisticated and have recently started to target cryptocurrency exchanges and their customers.
“More recently, fraudsters are more frequently utilizing custodial accounts held at financial institutions for cryptocurrency exchanges or having victims send funds directly to cryptocurrency platforms where funds are quickly dispersed.”
Fraudsters mainly conduct these scams by spoofing phone numbers and compromising business emails.