Cryptocurrency scams cost Americans more than $2.3 billion in 2022, FBI’s internet crime data revealed. California was the worst-hit state with almost one out of every five victims belonging to The Golden State. South Dakota residents incurred the highest average losses in crypto scams last year.
Crypto scams are on the rise in the US
With cryptocurrency growing in popularity, crypto scams are on the rise too. These scams aren’t just limited to fraudulent investment schemes. Scammers prefer cryptocurrency as the payment method in other forms of scams as well. The anonymity offered by these digital currencies and the irreversible nature of their transactions make things convenient for scammers.
An analysis of the data by VPN service provider Surfshark revealed that crypto scams represented about one-fourth (24 percent) of all cybercrime-related financial losses incurred by Americans last year, with total crypto losses coming in at $2.3 billion. That’s despite only six percent of victims throughout the US paying scammers in cryptocurrencies. These numbers tell you the financial impact of crypto scams.
On average, each crypto scam victim in the US lost $86k in 2022. That’s more than five times the average losses of $16k incurred by victims of non-crypto internet crimes. South Dakotans suffered the biggest losses, with the average number for the state almost clocking a million dollars ($998k per victim). Crypto scam victims in no other state suffered average losses of more than $150k. New Hampshire ($147k), Georgia ($138k), Delaware ($121k), and California ($117k) are the next four states with the highest average losses.
California had nearly 5,000 crypto scam victims last year
Despite a relatively low average loss, California recorded the highest total losses from crypto scams in the US last year. That’s because 18 percent of all crypto scam victims in the country were California residents. The most populous US state had 4,879 individuals losing some money to crypto scams in 2022. The combined losses amounted to $572.6 million, which is one-fourth or 25 percent of the nation’s total of $2.3 billion.
“Criminals prefer cryptocurrencies not only because of their relative anonymity,” Surfshark’s Chief Information Security Officer Aleksandr Valentij explains. “If the victim realizes they’ve been scammed, crypto transfers cannot be reversed like bank transfers, and the money is lost forever, especially if it goes through a cryptocurrency tumbler or is ‘washed’ in any other way. This is particularly convenient for scammers, and combined with the inflated interest in crypto we have at the moment, it creates a perfect environment for crypto scams.”