🚨 Crypto Scams Hit $9.3B in 2024 – FBI Sounds the Alarm

Inside Crypto Crime’s Explosive 2024 Surge: Scams, QR Codes, and AI Extortion

Hey readers,

If 2023 was the year crypto tried to regain legitimacy, 2024 was the year fraudsters doubled down—and then some. In a chilling new report from the FBI’s Internet Crime Complaint Center (IC3), crypto-related fraud hit an all-time high, with a shocking 149,686 complaints and $9.3 billion in reported losses.

From fake investments to emotionally manipulative scams and AI-enhanced extortion, the dark side of crypto has never looked more menacing—or more creative. Let’s break down the most alarming trends and what they mean for investors, regulators, and fintech innovators alike.

💸 Record-Breaking Losses: Crypto Crime Jumps 115%

Crypto scams are no longer fringe crimes—they’ve gone mainstream. The IC3 recorded a 115% year-over-year increase in crypto-related fraud complaints in 2024, translating to an eye-watering $9.3 billion in losses, up 66% YoY.

At the center of it all? Investment scams. These accounted for a staggering $5.8 billion—over 62% of the total crypto fraud losses. This category saw nearly 42,000 complaints, a 29% jump from 2023, proving just how effective these scams continue to be.

🐖 The Rise (and Horror) of “Pig Butchering”

The dominant fraud trend continues to be “pig butchering” schemes—named for the way scammers “fatten up” victims by building trust before financially bleeding them dry. These scams lure people into fraudulent investment platforms where they’re urged to deposit increasing sums of cryptocurrency, only to be ghosted by the perpetrators.

The tragedy? Many of the scammers aren’t just criminals—they’re victims too.

According to the United Nations, around 100,000 people from over 50 countries are trapped in Southeast Asian scam compounds, often victims of human trafficking. These individuals are coerced—sometimes violently—into orchestrating crypto fraud, romance scams, and online impersonations. Behind the billion-dollar grift lies a disturbing humanitarian crisis.

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⚠️ Extortion Goes Digital—and Personal

While investment scams claim the most money, extortion schemes led the pack in volume, making up nearly 32% of all crypto-related complaints in 2024.

The IC3 received over 47,000 reports of crypto extortion, but they accounted for just $96 million in losses. The relatively low dollar figure suggests increasing awareness and stronger resistance among potential victims. But here’s where it gets worrying: these scams are evolving fast, powered by generative AI.

Deepfake technology is enabling scammers to clone voices and faces, fabricate compromising images, and threaten to release them unless paid in crypto. The FBI flagged a noticeable rise in such cases—where fake but convincing images or videos are used as blackmail material.

The old-school ransom note just got a digital makeover.

🤖 AI Is the New Weapon of Choice

Generative AI tools are being exploited by bad actors to scale fraud like never before. They’re used to:

• Create fake identities and personas

• Forge documents and ID photos

• Clone voices for voice phishing (vishing)

• Generate deepfake videos for blackmail or misinformation

The tech used for customer experience and personalization in fintech is being repurposed to devastate lives. The challenge now is creating safeguards that can distinguish between helpful and harmful uses of AI in financial systems.

🏧 Crypto ATMs and QR Codes: The New Frontline of Fraud

Another trend shaking up law enforcement: the rise of scams involving crypto ATMs and QR codes.

In 2024, the IC3 recorded nearly 11,000 complaints involving these tools, totaling $246.7 million in losses. That’s nearly double the case volume from the previous year. Victims are often tricked into using physical crypto ATMs or scanning QR codes as part of fake investments, romance cons, or impersonation scams.

The top offenders here?

• Extortion scams: 4,189 complaints

• Tech support scams: 3,037 complaints

• Government impersonation: 1,786 complaints

• Investment scams: 606 complaints

Though investment fraud was less frequent in this category, it still drained $38 million, while tech support scams alone siphoned off $107 million.

🔐 Ransomware Payments Drop—But Don’t Celebrate Yet

In some rare good news, ransomware payouts actually declined in 2024. Blockchain analytics firm Chainalysis estimates that ransomware gangs pulled in $813.5 million, down from $1.25 billion in 2023.

This marks the first decline in ransomware revenues since 2022, thanks to:

• Improved law enforcement collaboration

• Public resistance to paying ransoms

• Better cybersecurity protocols

Still, the threat remains real. Cybercriminals are innovating faster than ever, and as crypto adoption grows, so does its potential for misuse.

🧭 Final Thoughts: Regulation, Education, and Responsibility

As crypto crime surges, the fintech industry finds itself at a crossroads. Regulation is tightening, but enforcement remains uneven. Technology is advancing, but so are the tools of scammers. The solution? A three-pronged approach:

1. Education: More awareness campaigns for both retail and institutional investors.

2. Innovation with Guardrails: AI and blockchain tools need built-in fraud detection and ethical boundaries.

3. Collaboration: Cross-border partnerships between fintechs, law enforcement, and regulators must become the norm—not the exception.

The decentralized future of finance can’t be built on centralized crime. Let’s move forward with eyes wide open.

Until next time,
The Fintech Forward Team