The FBI's Internet Crime Complaint Center (IC3) has released its 2023 report, revealing a significant increase in the use of digital assets in cryptocurrency-related fraud and 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 cryptocurrencies in fraudulent activities.
Virtual currency investment scam
According to FBI data, cryptocurrency-related investment fraud has increased significantly, with losses increasing from $2.57 billion in 2022 to $3.94 billion in 2023, which is 53% % increase.
These scams often lure individuals with promises of high investment returns on digital currencies. The report says these scams are becoming increasingly sophisticated, with cybercriminals taking advantage of the annual growth in the digital asset industry to lure victims.
This data shows that victims of all ages are targeted by crypto investment scams, with complaints particularly concentrated among individuals between the ages of 30 and 60.
This report highlights the critical importance of using security measures such as two-factor and multi-factor authentication to protect against such scams.
It also highlights the need to verify payment and purchase requests in secure ways beyond email communications to reduce the risk of falling victim to these schemes.
Increased use of cryptocurrencies in cybercrime
The report also revealed an increase in incidents in which fraudsters misuse cryptocurrencies to facilitate the rapid transfer and dispersal of stolen funds through Business Email Compromise (BEC) schemes.
BEC fraud involves manipulating email accounts to authorize fraudulent transactions, often resulting in significant financial loss to the victim.
Meanwhile, ransomware attacks that demand payment in cryptocurrencies to decrypt data are also on the rise. The report documents an 18% annual increase in the number of ransomware complaints and a 74% increase in reported losses, totaling $59.6 million in 2023.
The report highlighted that these attacks highlight the persistent threat posed by cybercrime, particularly to critical infrastructure sectors.
In response to the surge in cryptocurrency fraud, IC3's Recovery Assets Team (RAT) is playing a vital role in mitigating financial losses. With a 71% success rate in freezing fraudulent transfers, RAT was able to secure over $538.39 million of the $758.05 million reported losses in 2023.
As cybercriminals continue to exploit digital currencies, the need for increased vigilance, improved cybersecurity measures and increased public awareness has become paramount, the report said. He added that collective efforts are needed to protect against the evolving threats of the digital age, especially in the rapidly expanding realm of digital assets.
