Losses from cryptocurrency-related frauds and scams increased 45% in 2023 from 2022, totaling more than $5.6 billion, as scammers increasingly took advantage of the speed and irreversibility of digital asset transactions, the U.S. FBI said Monday.

WHY IT IS IMPORTANT

Cryptocurrencies like bitcoin and ether have become more popular as token prices have soared to new highs and as exchange-traded funds tracking their prices have hit the U.S. market this year.

That growth, however, has also increased the use of cryptocurrency by criminal actors, the FBI's Internet Crime Complaint Center said in a new report.

While crypto transactions are recorded on publicly available blockchains, allowing law enforcement to easily trace funds, often money is transferred quickly overseas, where U.S. officials can encounter obstacles like lax anti-money laundering laws in certain jurisdictions, the FBI said.

BY THE NUMBERS

In particular, losses from investment scams with a nexus to cryptocurrency accounted for 71% of all crypto-related losses last year, the report said. Call center scams and government impersonation scams accounted for 10% of losses.

The FBI received the most complaints referencing cryptocurrency from people over the age of 60, with losses from that group amounting to more than $1.6 billion.

KEY QUOTE

"Since cryptocurrencies eliminate the need for financial intermediaries to validate and facilitate transactions, criminals can exploit these characteristics to support illicit activity such as thefts, fraud, and money laundering," the FBI said.

  - Reuters