FBI Reveals $5.6B Crypto Scam Epidemic: Here’s How to Stay Safe

• The Federal Bureau of Investigation (FBI) has warned against rising crypto scams.
• A report has unveiled the extent of losses incurred over the past year.
• Safety measures can protect investors from suffering losses.

The crypto industry has long been haunted by the persistent threat of malicious actors who lurk in the shadows, waiting for the perfect opportunity to strike unsuspecting victims. Weaponizing all forms of hacks and scams, these bad actors have caused significant financial losses for investors and institutions alike.

The devastating trend has prompted enforcement actions from global authorities and, in the latest, a cautionary release from the Federal Bureau of Investigation.

FBI: Americans Lost Billions to Crypto Scams

A recent FBI report has once again revealed the harsh impact of crypto hacks and scams. On Monday, September 9, the investigative agency published its Cryptocurrency Fraud Report for 2023, reporting a staggering $5.6 billion in losses.

The FBI emphasized that malicious actors extensively used cryptocurrency in various fraudulent schemes throughout the year, with investment scams taking the lead as the most reported and accounting for about $3.9 billion lost.

While crypto-related complaints represent only about 10% of the reported 69,000 financial fraud complaints, the FBI emphasized that they account for nearly 50% of the total losses incurred. 

The latest record marks a 45% increase from the losses witnessed in 2022. FBI Director Christopher Wray stressed that “Scams targeting investors who use cryptocurrency are skyrocketing in severity and complexity,” urging investors to employ safety tips to ensure protection.

How to Stay Safe

Here are some safety measures to practice to avoid falling victim to the trend of hacks and scams plaguing crypto investors.

• Protect Personal Information: Never share your personal information without verifying the identity of the recipient. Scammers often seek to isolate victims and exploit their trust, stealing their personal information and causing losses.
• Avoid Suspicious Apps: One of the most weaponized tactics of malicious actors is the use of compromised software to gain unauthorized access to sensitive information. Do not download or use investing apps unless you confirm their legitimacy. Fraudulent apps can be used to steal personal and financial information.
• Scrutinize Investment Opportunities: Be cautious of investment opportunities offered by strangers or individuals. Always verify the legitimacy of any such opportunities and be wary of offers that seem too promising.
• Watch for Fake Websites: Be vigilant about impersonating domain names and websites that imitate legitimate financial institutions, especially cryptocurrency exchanges. Malicious actors often alter domain names to deceive investors.
• Beware of Get-Rich-Quick/ Ponzi Schemes: If an investment offer promises rapid and substantial returns, approach it skeptically. Such schemes often lead to significant financial losses.
• Report Suspicious Calls or Messages: If you receive unsolicited calls or messages regarding investments or requesting personal information, report them to relevant authorities. Such prompt action can help prevent falling victim to scams and attacks. The FBI also encourages reporting such complaints even if no financial loss has occurred.

On the Flipside

• The crypto industry recorded losses totaling approximately $1.4 billion in the first half of this year.
• In  April 2024, the FBI cautioned Americans against the use of unregistered crypto service providers.

Why This Matters

The FBI’s latest report once again highlights the impact of scams within the crypto industry. As scammers become more sophisticated, the importance of safety measures to ensure protection cannot be overstated. 

Read this article to learn more about losses incurred to hacks and scams in August 2024:
Hackers Steal $313.86M in Crypto Across Over 10 Incidents in August

Regulatory authorities in Nigeria are gearing up to target non-compliant crypto exchanges, read more here:
Nigeria Threatens Fresh Crypto Crackdown Amid Binance Spat