The Federal Bureau of Investigation's (FBI) 2023 Internet Crime Report reveals an alarming spike in cryptocurrency-related investment fraud.
According to the report, cryptocurrency fraud accounted for 86% of all investment fraud losses in the United States, amounting to $3.94 billion.
This is a 53% increase compared to 2022, when multiple crypto frauds plagued the industry, including the $32 billion FTX bankruptcy and the $4.7 billion Celsius bankruptcy (the founders of both companies are facing fraud charges). was indicted).
This surge in crypto-related fraud is consistent with a broader trend of escalating online financial fraud. The Internet Crime Complaint Center (IC3) has recorded online fraud losses totaling more than $12.5 billion.
The report detailed how investment fraud, primarily driven by crypto fraud, surged 38% to $4.57 billion. It is also clear that cybercriminals are increasingly taking advantage of the anonymity and rapid transaction capabilities of digital currencies, including not only Bitcoin (BTC) but also meme coins such as Dogecoin (DOGE) and Shiba Inu (SHIB). became.
According to the FBI, the plan is becoming easier to carry out. Fraud types range from business email attacks (costing $2.9 billion in losses) to more complex impersonation and phishing campaigns.
What makes the 2023 cryptocurrency fraud outbreak particularly noteworthy is the extent to which the perpetrators were reaching out.
FBI: Fraudsters are evolving
According to the FBI, criminals use custodial accounts at major financial institutions, cryptocurrency exchanges, and third-party payment processors as conduits for fraud.
This strategy not only facilitates the rapid dispersal of illegally obtained funds, but also complicates the tracking and recovery process.
The exponential growth of these crimes can also be viewed through a global lens, with FBI findings reverberating beyond the borders of the United States, with Germany, for example, collecting more than $2 billion in piracy proceeds. One example is the large-scale seizure of Bitcoin.
The assets seized by the German government originated from the operation of a website identified in previous investigations as “Movie2k.” The site is known for streaming pirated movies, and since its founding in 2008, it has become one of the most frequented online sites for such content in Germany.
The operator distributed more than 880,000 pirated movies and made money from advertising and subscription fees. The suspects identified included a Berlin-based programmer and a real estate tycoon, who were later arrested on charges of commercial money laundering.
The others arrested were two people from Germany and Poland who allegedly amassed Bitcoin through the site's profits until it was shut down in 2013.
One of the suspects reportedly took a step towards reparation by voluntarily transferring disputed Bitcoins to the Federal Criminal Police Authority (BKA) wallet, and subsequently deposed of these funds. Their fate awaits a judicial decision.
Earlier that month, U.S. authorities announced plans to sell about $132.5 million worth of Bitcoin seized during an investigation into the infamous Silk Road market.
A Maryland district court has unveiled plans to liquidate the seized digital currency. This digital currency is the amount collected from two major busts involving Ryan Fares and Sean Bridges.
Specifically, Fares' stash worth 2,874.904,256 Bitcoins (valued at $129,251,164.54) was secured in Memphis, Tennessee on February 10, 2021. Another batch consisting of 58.742155166 Bitcoins (valued at approximately $3,34833.65) was taken from Mr. Fares of Erling. Tong, Virginia, May 11, 2021.
In parallel, financial institutions are taking decisive steps to reduce the risks associated with crypto trading. Notably, JPMorgan Chase's decision to suspend cryptocurrency trading for UK clients highlights the growing anxiety surrounding these digital assets.
This proactive stance is aimed at protecting consumers from the escalating threat of cryptocurrency-related fraud, with consumer losses increasing dramatically, exceeding 40% in the UK alone.
