The FBI’s Internet Crime Complaint Center (IC3) has released its 2023 report, which shows a significant increase in crypto-related fraud and the use of digital assets in cybercrime.
The 2023 IC3 report serves as a comprehensive overview of the current state of internet crime, including the challenges and risks posed by the use of crypto in fraudulent activities.
Crypto investment fraud
The FBI data shows a notable increase in crypto-related investment scams, with losses escalating from $2.57 billion in 2022 to $3.94 billion in 2023 – reflecting a 53% increase.
These scams often lure individuals with the promise of high returns on digital currency investments. According to the report, these scams are becoming increasingly sophisticated, with cybercriminals leveraging the growth of the digital asset industry over the course of the year to lure victims.
This data indicates that victims across all age groups are being targeted by crypto investment fraud, with a notable concentration of complaints among individuals between the ages of 30 and 60.
The report highlights the critical importance of using security measures such as two-factor or multi-factor authentication to protect against such scams.
It also emphasizes the need to verify payment and purchase requests through secure methods beyond email communications to reduce the risk of falling victim to these schemes.
Increasing use of cryptocurrencies in cybercrime
The report also revealed an increase in incidents of fraudsters abusing crypto to facilitate the rapid transfer and distribution of funds stolen through Business Email Compromise (BEC) schemes.
BEC scams involve manipulating email accounts to authorize fraudulent transactions, often leading to significant financial losses for victims.
Meanwhile, ransomware attacks, which demand payment in cryptocurrency to decrypt data, have also seen a rise. The report recorded an 18% annual increase in ransomware complaints and a 74% increase in reported losses – totaling $59.6 million by 2023.
The report highlighted that these attacks highlight the continued threat posed by cybercriminals, particularly to critical infrastructure sectors.
In response to the increase in crypto fraud, IC3’s Recovery Asset Team (RAT) has played a crucial role in mitigating financial losses. With a 71% success rate in freezing fraudulent transfers, the RAT managed to secure more than $538.39 million of the reported $758.05 million in losses in 2023.
As cybercriminals continue to exploit the digital currency landscape, the need for increased vigilance, improved cybersecurity measures and greater public awareness has become critical, the report said. It added that a collective effort is needed to protect against the evolving threats of the digital age, especially in the rapidly growing domain of digital assets.