TLDR

• According to the FBI, Americans lost over $9 billion to crypto fraud last year.
• It was a 66% increase from 2023.
• The demographic hardest hit? Older users who are 60+.

The Federal Bureau of Investigation’s (FBI) Internet Crime Complaint Center (IC3) just dropped its annual report, and the numbers aren’t pretty. Over $9.3 billion was lost to crypto fraud and scams in 2024, marking a 66% increase from the previous year. 

If you’re new to the world of crypto or even just crypto-curious, this report serves as a stark reminder: the risks are as real as the potential rewards. But what are the red flags? And who’s most affected? Here’s a breakdown of what the FBI uncovered and how you can protect yourself. 

The Alarming Scope of Crypto Fraud 

According to the IC3 report, crypto fraud complaints hit an all-time high in 2024, with more than 140,000 individuals coming forward. 

Many of these cases targeted people who were unfamiliar with crypto’s terrain, especially those over the age of 60, a demographic that accounted for $2.8 billion of the total losses.

That’s nearly one-third of the $9.3 billion stolen, making older Americans the most affected by securities fraud and scams. However, age isn’t the only vulnerability. A lack of education and preparedness about crypto’s complexities can leave anyone exposed. 

Pro-Tip:  If you fall into this demographic and you think you may be dealing with a fraudster, ask someone for help. It could be the son who recommended crypto or another loved one. Maybe you heard about it on the web from someone like our founder, Peter. Directly contact the exchange you use and ask if the message or email you received is legitimate.

Where the Money Went 

The lion’s share of losses came from crypto investment schemes, accounting for the highest sums stolen. These scams often promise high returns with little to no risk (and yes, that should already set off alarm bells, even in crypto). Anyone claiming you can double or triple your money in weeks is almost always setting you up for disappointment. 

And if someone you don’t know asks to borrow one ETH and they’ll pay you two ETH next week, that’s one of the oldest scams in crypto’s book. Don’t fall for that one.

The FBI also flagged a surge in sextortion schemes, where scammers manipulated photos or videos to create fake explicit content and demanded ransom in crypto. These scams might sound niche, but they’re becoming more common due to crypto’s perceived anonymity. 

Then there’s the growing issue of crypto ATMs or kiosks being used as part of fraudulent schemes. These machines, frequently set up in convenience stores, vape shops, or gas stations, allow you to purchase cryptocurrency easily — but scammers have started using them as a way to funnel stolen funds. 

Record-Breaking Global Crypto Crimes 

This isn’t just an American issue. Global volumes of illicit crypto activity in 2024 were estimated at $41 billion, according to Chainalysis. Nearly 25% of these funds were tied to hacking, extortion, trafficking, or scams. 

Source

Some of 2024’s biggest headlines in crypto crime include the $1.4 billion heist from Bybit in March and the staggering $1.5 billion stolen by North Korean hackers. These incidents show that even major exchanges and high-profile players aren’t immune to vulnerabilities, further emphasizing the need for vigilance. 

Why Is Crypto Fraud Increasing? 

The rise in crypto fraud isn’t entirely surprising. Cryptocurrency is still uncharted waters for many, and the rapid influx of new users creates a perfect storm for scammers. 

High potential rewards draw in inexperienced investors, and the decentralized nature of crypto means once your funds are gone, they’re often gone for good. 

The lack of regulation in many countries adds to the issue. Without strict frameworks governing cryptocurrency transactions or platforms, fraudsters find it easy to operate with impunity. 

How Users Can Stay Protected 

If you’re new to crypto, here’s your roadmap for staying safe: 

1. Educate Yourself 

Scammers prey on gaps in knowledge. Take the time to understand how cryptocurrency works, the platforms you’re using, and how transactions are secured. Blogs, crypto education courses, and reputable news sources (like this one!) are a good place to start. 

2. Spot Too-Good-to-Be-True Deals 

If an investment opportunity seems unrealistically lucrative or requires you to act urgently, it’s likely a scam. Legitimate investments take time to grow and come with transparent details. 

3. Use Trusted Platforms 

Sticking to well-established crypto exchanges and platforms can reduce your risk. Stick with big, trusted names like Coinbase, Binance, and Kraken. 

4. Secure Your Wallet 

Invest in a hardware wallet (also called a cold wallet) instead of a software wallet for long-term storage. Always use two-factor authentication (2FA) for added security. 

5. Be Skeptical of Unsolicited Contact 

Scammers often pose as official representatives or “crypto experts.” Avoid engaging with unsolicited messages or emails, and never provide your wallet details to anyone. 

6. Verify, Verify, Verify 

Before making any transactions, triple-check wallet addresses, URLs, and the legitimacy of the parties you’re transacting with. Scammers are notorious for using fake sites that mimic legitimate ones. 

Are the Authorities Keeping Up? 

The $9.3 billion figure in the FBI’s 2024 report highlights just how lucrative crypto scams have become for bad actors. While regulatory bodies and law enforcement agencies are ramping up efforts, tackling crypto crimes is still a game of cat and mouse. 

Tracking transactions on the blockchain is relatively easy since all movements are recorded on a public ledger. However, the anonymity offered by some crypto platforms can stall investigations. Tools like Chainalysis or Elliptic are helping law enforcement agencies track illicit funds, but more preventive measures at the consumer level are needed. 

Be Aware, Not Scared 

While cryptocurrency holds immense potential to revolutionize finance and investment, its risks are equally high. The $9.3 billion lost to scams last year is made up of mostly inexperienced users, losing their funds to fraudulent schemes. They didn’t know better. But after reading this, you do. Take your time with this stuff, guys.

If you’re stepping into crypto for the first time, think of it as entering a new country where you don’t speak the language. Learn the basics before you start spending money. Ask questions, be cautious, and don’t be afraid to sit on the sidelines until you feel confident. 

We’re all navigating this new terrain together. Stay informed and cautious. That approach allows you to make the most of what crypto has to offer without becoming another statistic in the next IC3 report.