Crypto scams surged in 2023, with Americans losing $5.6 billion—up 45% from 2022, according to the FBI. Older adults were the hardest hit, while a lack of financial literacy and FOMO continue to expose investors to fraud.
Report on Crypto scams
Crypto scams are increasing in the U.S. The FBI’s recent report shows that Americans lost $5.6 billion in 2023, which is a 45% rise from the previous year. Older people, especially those over 65, were hit hardest, losing more than $1.6 billion. California had the biggest losses among states, totaling $1.1 billion.
Although crypto crimes only represent 10% of fraud reports, they caused almost 50% of all financial loses. Cryptocurrency is decentralized and transactions can’t be reversed, which makes investors prone to scams. This highlights the importance of better protection and knowledge.
The FBI is alerting people about common scams, such as fake business opportunities, tech support scams, romance scams, and job scams. Many people are not familiar with changing financial technology, and without proper financial education, buyers are easily tricked.
What Makes Crypto Investors at Risk?
The unstable cryptocurrency market offers the chance for big profits, but it can also lead to risky business choices. Research shows that 80% of investors feel FOMO, or fear of missing out. Scammers take advantage of this by pushing people to make quick choices.
A study by InvestiFi found that 35% of investors look for financial help online, and 25% don’t use any sources at all. Among younger investors aged 18-25, 40% learn about finance from influencers. Meanwhile, many people over 55 do not have solid financial schooling, which makes them more likely to fall for scams.
Relying on unreliable information can lead to several risks. Fraudsters can quickly create fake accounts that look real. Also, being overly confident because of online financial help makes many investors overlook risks, which makes them more likely to make bad choices or get scammed.
A big problem for safe crypto investment is a lack of understanding about finances. Many investors can’t afford financial counselors. Financial companies should use educational tools like videos, webinars, and personalized advice to help users make smart choices.
By providing educational materials, institutions can become reliable guides, assisting buyers in safely exploring the complex world of crypto.