Crypto scams continue to drain Americans’ life savings

Crypto scams are screwing over Americans, draining their life savings, and it’s only getting worse. One of the biggest moneymakers for these crooks is something called “pig butchering.” It’s exactly as nasty as it sounds. 

Scammers fatten up their victims with flattery and fake relationships, then slaughter them by stealing their cash, usually in the form of crypto.

The FBI’s Internet Crime Report says losses from investment scams jumped by 38% in 2023, hitting a new record. Out of $4.57 billion reported stolen, $3.96 billion came from fraudulent crypto schemes.

Latest victim

One woman, Carina, knows this scam all too well. She met her scammer on Bumble, a dating app, where the guy spent six weeks sweet-talking her. He spun a story about his luxurious lifestyle and how he was making a killing investing in crypto. 

After months of chatting, Carina was convinced. She ended up dumping $152,000 into what she thought was a legit investment site. It turned out to be a clone of Kraken, a real crypto exchange.

When she finally realized she’d been had, Carina tried to track down her money. She traced it to an exchange in Thailand and handed everything over to the cops.

Guess what? She still hasn’t gotten her money back. The scam was so slick that even with all the details in hand, law enforcement couldn’t crack it. 

The UN says these scams are often run by people forced into labor in Southeast Asia. It’s a global mess, with the money bouncing from country to country, making it nearly impossible for the authorities to get it back. 

Even when companies like Chainalysis manage to trace millions in stolen crypto, getting that money back to the victims is a whole other battle. 

Americans and crypto scams

The numbers speak for themselves. Back in 2018, Americans lost $12 million to crypto scams. Fast forward to 2021, and that number shot up to $680 million. By 2023, estimated losses had reached a sickening $2 billion. 

And this is despite all the supposed improvements in security and awareness. As of mid-2024, scammers had already grabbed around $679 million in cryptocurrency. 

It’s the second most popular way for fraudsters to get paid, just after bank transfers. 

What’s even more disturbing is the demographic breakdown. If you’re between 20 and 49, you’re three times more likely to fall for these scams than older folks. 

People in their 30s are the hardest hit, making up 35% of all reported fraud losses since 2021. The numbers are brutal: 

• If you’re 18-19, you’re losing about $1,000.
• In your 20s? You’re looking at $1,600.
• Your 30s will cost you $2,500.
• In your 40s, expect to lose around $3,200.
• The 50s crowd loses about $5,000.
• If you’re in your 60s, kiss $8,500 goodbye.
• People in their 70s are down $11,708 on average.
• Even the over-80s are getting cleaned out for $8,100.

Despite all this, there’s a weird silver lining. While the number of scams hasn’t slowed down, the revenue from these crypto scams dropped by 29.2% in 2023.

This could mean more people are catching on, but it’s still too early to tell if it’s making a difference in the long run.