Consumers Lost $9 Billion to Fraud Last Year–Will the Crypto Scam Upsurge Continue?

By Markus David

Director of Professional Services


We’re often encouraged to invest. Whether we want to buy a home, save for retirement, or grow funds for our children’s college education. However, investing can be perilous, not only for the inherent risks of losses but because of the large number of investment frauds, particularly crypto scams.

Consumers lost close to $9 billion in fraud in 2022 according to the U.S. Federal Trade Commission (FTC). Investment scams were responsible for the largest amount of losses to the tune of $3.8 billion. 

These involve broker fraud and crypto trading scams that tantalize would-be clients with deals that are supposed to provide a return on investment. However, many of these investment fraud victims not only fail to make money but lose the principal. In fact, often the fake broker disappears too. 

Not only did investment scams represent the largest percentage of total fraud, but the number of trading scams has risen 100% over 2021. 

Broker and Crypto Scams – An Issue of Misplaced Trust

Broker and crypto scams may be catastrophic, but they are also preventable. Although hacking is also preventable up to a point and we can protect ourselves by installing anti-virus software, people aren’t usually robbed by an investment scam without sending transactions to another party. 

Instead of catching us entirely unawares, a crypto scam will lure us gradually. Broker scams usually work together with phishing crimes and may even take over social media accounts of people we know. 

They may impersonate a friend or a relative and talk up a money-making idea. We may otherwise have rejected the proposal outright if it came from a stranger, but since we feel we know the person, we may be more likely to fall prey to these broker frauds and crypto scams. 

Basically, most people who lose money to these frauds have done so because they misplaced their trust. This could be key to understanding why so many crypto scam victims fail to report the theft. They may feel partially responsible for their losses and embarrassed about the situation. Also, broker scam victims may be too quick to assume defeat and conclude they’ll never get their money back.

If you’ve lost money to any type of investment scam or crypto scam, it’s important not to give up hope and to understand that fund recovery is possible. 

Crypto Regulations, Education and Crypto Recovery–Three Weapons in the Anti-Fraud War

Looking at the rise of crypto scams over multiple years, we can clearly see an upward trend. The numbers are nothing short of staggering. Between 2020 and 2022, crypto-related crime rose by 79%. In 2021, a total of $ 1 billion was lost to crypto scams. This statistic rose to $3.8 billion in 2022. What will the numbers be like by the end of 2023? 

There actually is some reason to hope that the fraud numbers could decrease. Concerning crypto scams in particular, regulations in Canada and the EU to increase accountability for crypto brokers and exchanges are a ray of hope. U.S. lawmakers are discussing similar legislation and the IRS is already cracking down on bitcoin scam tax evasion.

The second reason to hope for a safer future for online trading is that consumers are increasingly educating themselves about the dynamics of broker and crypto scams and how to avoid them. Just as in the ‘90s, people learned to stay safe on the internet and protect themselves online, the same holds true of crypto trading and online brokers. 

Third, as people become aware of the fund recovery services at their disposal, the operators of crypto scams may become more cautious. Increasingly, high-profile fund recovery cases are rewarding bitcoin scam victims. Now that fraudsters have a reason to fear they will pay the price for their crimes, would-be online criminals may think twice before they try to rob people online.  

Lost Money to an Investment or Crypto Scam? Talk to MyChargeBack

If you have lost money on the blockchain through unregulated brokers, bitcoin wallet hacking, or fake merchants, talk to the MyChargeBack team. Our crypto investigations will provide evidence to bolster your claim. 

MyChargeBack has developed working relationships with law enforcement agencies worldwide, has extensive knowledge and experience with crypto tracking, and can improve your prospects of getting your funds back.