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Americans reported losing $5.6 billion to cryptocurrency scams in 2023, with older Americans hit the hardest, according to the FBI.
The FBI’s first annual Cryptocurrency Fraud Report, published Monday, shows that Americans reported more than 69,000 complaints last year saying they had been scammed into sending cryptocurrency to criminals, often by using commonly available crypto ATMs.
Americans 60 years old and older filed more than 16,000 complaints of cryptocurrency fraud and reported losing over $1.6 billion, much more than any other age group. People under 20 had the fewest, with 858 complaints totalling almost $15 million.
The reported scams ranged from phony tech support help and extortion to scammers impersonating government officials. The vast majority of reported losses — almost $4 billion — were a result of investment scams, a category that the FBI uses primarily to refer to so-called pig butchering scams. That’s a 53% increase from the $2.57 billion losses reported in 2022.
In pig butchering scams, fraudsters assume a fake persona and cultivate a deep, often monthslong romantic relationship or friendship with a victim, then convince them to invest more and more of their savings into a bogus cryptocurrency investment platform.
“These schemes offer individuals large returns with the promise of minimal risk,” the FBI said in the report. “Over the years, cryptocurrency’s widespread promotion as an investment vehicle, combined with a mindset associated with the ‘fear of missing out,’ has led to opportunities for criminals to target consumers and retail investors — particularly those who seek to profit from investing but are unfamiliar with the technology and the attendant risks.”
A spokesperson for Chainalysis, a firm that specializes in tracking cryptocurrency payments, told NBC News that pig butchering scams were by far the most lucrative form of cyberfraud last year, with an average theft of nearly $5,000 per victim.
Amy Nofziger, the director of fraud victim support for the AARP, told NBC News that scammers target older Americans both because they often hold more wealth and because they may be less familiar with newer technology like cryptocurrencies.
“While $5.6 billion in losses is substantial, the true figure is likely much higher due to unreported cases,” she said.
The report found that the majority of victims who reported they had used a cryptocurrency kiosk, or a “bitcoin ATM,” in the course of being defrauded — 2,6767 out of 4,475 — were over 60, indicating it’s mostly older Americans who struggled to use a cryptocurrency exchange as they were defrauded.
Cryptocurrency kiosks are public machines that allow anyone to deposit cash for Bitcoin or other types of cryptocurrency. They make it particularly easy for scammers to get victims who are unfamiliar with how that technology works to send over money, Nofziger said. Criminals often simply send victims a QR code to scan and tell them to put cash in the machine, she said.
It’s rare for Western law enforcement to arrest perpetrators of such scams. Last year, a United Nations report found that pig butchering scams are often run by human trafficking victims in Southeast Asia. In December, however, federal prosecutors arrested four men, three in southern California and one in Chicago, for allegedly stealing more than $80 million in a pig butchering operation.