Crypto Scams in 2023 Beat the Records with $5.6B

• FBI Internet Crime Complaint Center reports that Crypto scams in 2023 hit the records with $5.6B
• Investment scams were the most frequent and most lucrative, reaching approximately $4B
• The highest number of victims were between 30 and 49 years old, but victims over 60 experienced the most losses at $1.24B
• However, many crypto fraudsters are also victims themselves, particularly human trafficking throughout Southeast Asia

The FBI Internet Crime Complaint Center has released a report that reveals figures regarding the growing number of crypto fraud, as well as a record $5.6B in 2023, a 45% increase from 2022.

The report also provides many other revealing figures like the average age of most victims is between 30 and 49 years old, as well as the biggest losses for victims over 60 amounting to $1.24B.

However, the 2022 investigation conducted first by ProPublica, later by the United Nations indicates that most crypto fraudsters are themselves victims of the slave trade mostly from Southeast Asia, and work under duress.

Details of the FBI Internet Crime Complaint Center Report

This type of fraud is sometimes referred to as “pig butchering” because scammers often spend a lot of time and effort first to build a relationship and maximize the trust of their victims.

Also, although IC3 takes complaints regardless of citizenship, 83% of complaints came from U.S. citizens, with California residents ranking highest with 9,522 complaints.

Human Trafficking Nexus

Meanwhile, earlier investigations in 2022 by ProPublica and then by the United Nations found that most crypto fraudsters work under duress because they are victims of the slave trade themselves, who have incurred huge debts and are forced to repay them in this way.

According to the FBI report, there are entire “pig slaughtering gangs” behind this, mostly operating in Southeast Asia, offering fake job ads that become a trap.

"These compounds hold workers against their will and use intimidation to force the workers to participate in scam operations. Criminal actors post false job advertisements on social media and online employment sites to target people, primarily in Asia. Workers are often told they must pay for travel and other expenses, meaning the worker starts off in debt. They must then work off the debt while also trying to pay off their room and board. The criminal actors use the worker’s mounting debt and fear of local law enforcement as additional means to control them. Trafficked workers are sometimes sold and transferred between compounds, further adding to their debt," mentioned in the report.

Conclusion

The data in the report is truly showcasing, the numbers have been high in the past year, and the trend is almost doubling.

The situation is also greatly complicated by another report which makes it clear that the attackers have no choice, making the whole thing a big ethical dilemma.

However, one thing is certain, for the good of the entire crypto industry, there should be fewer scams, and part of the responsibility also lies with the users, mainly in the desire to be educated and aware of key Web3 regulations and events.