Scams & Fraud Cost Crypto Users Over $9B in 2024, Elderly Hit Hardest
This is a 66% increase from the previous year. Elderly victims were hit the hardest, with $2.8 billion in losses. Fraudulent investment schemes dominated, while sextortion and scams involving crypto ATMs also surged. AI-driven impersonation scams worsened the threat landscape, and was even recently seen in a case involving crypto influencers like Scott Melker. Meanwhile, victims of the Celsius Network collapse are still seeking justice. Over 200 impact statements were submitted ahead of Alex Mashinsky’s sentencing on May 8, where he faces up to 30 years in prison.
FBI Reports Record-Breaking Crypto Fraud Losses
The Federal Bureau of Investigation’s (FBI) Internet Crime Complaint Center (IC3) revealed a big surge in cryptocurrency-related fraud in its latest annual report. In 2024 alone, more than 140,000 complaints involving digital assets were submitted to the IC3, with reported losses soaring to an estimated $9.3 billion. This is a 66% increase compared to the $5.6 billion in losses that was reported in 2023.
(Source: FBI)
The report pointed out that people aged 60 and older were disproportionately affected, and submitted close to 33,000 complaints. This group also accounted for $2.8 billion of the total losses. The elderly demographic not only experienced the most serious financial damage but also filed the highest number of complaints.
(Source: FBI)
Fraudulent crypto investment schemes were responsible for the bulk of the financial losses, while the most frequently reported scam category was “sextortion,” in which criminals used manipulated images or videos to blackmail victims. Other common tactics included scams involving cryptocurrency ATMs and kiosks, which have become increasingly popular tools for fraud.
According to the IC3, the total reported losses from all internet-related crimes in 2024 reached a record $16.6 billion. Ransomware was still the top threat to critical infrastructure, with incidents rising 9% year-over-year. Although the FBI made progress in mitigating these threats through “Operation Level Up,” which prevented an estimated $285 million in potential losses between January 2024 and January 2025, the report suggests the threat landscape is far from contained.
Blockchain analytics firm Chainalysis reported that roughly $41 billion in crypto transactions in 2024 were linked to illicit activity. Around a quarter of those funds were associated with hacking, extortion, trafficking, or scams. The year also saw some of the largest crypto heists on record, including a $1.4 billion theft from Bybit in March and more than $1.3 billion that was allegedly stolen by North Korean hackers.
(Source: Chainalysis)
Looking ahead, Chainalysis warned that 2025 could bring an even bigger wave of fraud, largely fueled by the growing accessibility and effectiveness of generative AI. These tools have made it a lot easier and cheaper for cybercriminals to scale their operations. This poses new challenges for regulators, law enforcement, and everyday users in the digital finance ecosystem.
AI Fraudsters Steal Millions
AI’s destructive role in crypto fraud recently came to light. Crypto podcaster Scott Melker, host of The Wolf Of All Streets, revealed that scammers are using his name, face, and even AI-generated identities to defraud unsuspecting victims. This included one individual who lost a staggering $4 million.
In a post that was shared on April 23, Melker described feeling ”sick” after being informed by a private investigator that a Nigerian scam group impersonated him with a fake driver’s license and an email account designed to appear legitimate. The fraudsters even went as far as conducting sophisticated Zoom calls with AI avatars, and allegedly spoofed the identities of Melker’s wife and children to make their deception look more legit.
Melker explained that the group scammed multiple people by using generative AI to create highly convincing identities and interactions. This is very similar to other incidents across the crypto space. Technical analysis group TheChartGuys reported a comparable case where scammers used deepfake voice technology to impersonate them. This led one victim to lose $5,000.
While the tools that were used by these scammers are becoming increasingly advanced, not all of their tactics are flawless. Crypto trader and advisor “Nebraskan Gooner” shared that some of the AI-generated fake IDs had noticeable errors in formatting, which could be spotted with a basic internet search. He is quite shocked that such a well-organized operation could still produce documents with clear mistakes.
On the bright side, the wave of AI-enabled fraud is not going unnoticed by authorities and industry experts. In March, California’s Department of Justice announced the emergence of seven new crypto scam formats taking advantage of artificial intelligence.
Meanwhile, Microsoft also weighed in on the issue, and stated in a recent report that malicious actors are using AI to enhance their social engineering tactics. The software giant warned that AI tools are being employed to scrape the web for personal and corporate data, which scammers then use to construct highly believable lures and targeted attacks.
Melker acknowledged the worrying trajectory. “It’s going to get exponentially worse, I would imagine,” he said. He is now one of many crypto personalities getting more worried about generative AI that blurs the lines between real and fake.
Celsius Victims Plead for Accountability
Even years after a crypto fraud case, victims still struggle to find some justice. Federal prosecutors recently submitted over 200 victim impact statements in the case against Alex Mashinsky, the founder and former CEO of the now-defunct crypto lending platform Celsius Network.
According to a letter that was filed on April 23 by interim US Attorney for Manhattan Jay Clayton, the statements span 418 pages and outline the emotional and financial toll the platform’s collapse had on hundreds of victims. Many users recounted trusting Mashinsky’s repeated assurances that Celsius was a safe place to store their digital assets, only to lose very large portions of their savings.
Alex Mashinsky
Celsius once offered crypto yield accounts and loans collateralized by cryptocurrency, but stopped withdrawals in mid-2022 amid a broader crypto market meltdown before filing for bankruptcy in July of that year. Mashinsky was indicted in July of 2023 and later pleaded guilty to commodities and securities fraud in December. He faces up to 30 years in prison if the sentences are applied consecutively.
(Source: X)
While most of the submitted statements call for the harshest possible sentence, a minority have asked for leniency. One letter from a person named “Mike” claimed without evidence that Mashinsky was targeted in a coordinated attack led by FTX founder Sam Bankman-Fried. Another, from Artur Abreu, argued that macroeconomic factors played a big role in Celsius’ downfall and urged the court to consider Mashinsky’s remorse.
Mashinsky himself asked for a sentence of no more than one year and one day. His sentencing is scheduled for May 8, while the government's formal sentencing recommendation is expected on April 24.
Scams & Fraud Cost Crypto Users Over $9B in 2024, Elderly Hit Hardest
This is a 66% increase from the previous year. Elderly victims were hit the hardest, with $2.8 billion in losses. Fraudulent investment schemes dominated, while sextortion and scams involving crypto ATMs also surged. AI-driven impersonation scams worsened the threat landscape, and was even recently seen in a case involving crypto influencers like Scott Melker. Meanwhile, victims of the Celsius Network collapse are still seeking justice. Over 200 impact statements were submitted ahead of Alex Mashinsky’s sentencing on May 8, where he faces up to 30 years in prison.
FBI Reports Record-Breaking Crypto Fraud Losses
The Federal Bureau of Investigation’s (FBI) Internet Crime Complaint Center (IC3) revealed a big surge in cryptocurrency-related fraud in its latest annual report. In 2024 alone, more than 140,000 complaints involving digital assets were submitted to the IC3, with reported losses soaring to an estimated $9.3 billion. This is a 66% increase compared to the $5.6 billion in losses that was reported in 2023.
(Source: FBI)
The report pointed out that people aged 60 and older were disproportionately affected, and submitted close to 33,000 complaints. This group also accounted for $2.8 billion of the total losses. The elderly demographic not only experienced the most serious financial damage but also filed the highest number of complaints.
(Source: FBI)
Fraudulent crypto investment schemes were responsible for the bulk of the financial losses, while the most frequently reported scam category was “sextortion,” in which criminals used manipulated images or videos to blackmail victims. Other common tactics included scams involving cryptocurrency ATMs and kiosks, which have become increasingly popular tools for fraud.
According to the IC3, the total reported losses from all internet-related crimes in 2024 reached a record $16.6 billion. Ransomware was still the top threat to critical infrastructure, with incidents rising 9% year-over-year. Although the FBI made progress in mitigating these threats through “Operation Level Up,” which prevented an estimated $285 million in potential losses between January 2024 and January 2025, the report suggests the threat landscape is far from contained.
Blockchain analytics firm Chainalysis reported that roughly $41 billion in crypto transactions in 2024 were linked to illicit activity. Around a quarter of those funds were associated with hacking, extortion, trafficking, or scams. The year also saw some of the largest crypto heists on record, including a $1.4 billion theft from Bybit in March and more than $1.3 billion that was allegedly stolen by North Korean hackers.
(Source: Chainalysis)
Looking ahead, Chainalysis warned that 2025 could bring an even bigger wave of fraud, largely fueled by the growing accessibility and effectiveness of generative AI. These tools have made it a lot easier and cheaper for cybercriminals to scale their operations. This poses new challenges for regulators, law enforcement, and everyday users in the digital finance ecosystem.
AI Fraudsters Steal Millions
AI’s destructive role in crypto fraud recently came to light. Crypto podcaster Scott Melker, host of The Wolf Of All Streets, revealed that scammers are using his name, face, and even AI-generated identities to defraud unsuspecting victims. This included one individual who lost a staggering $4 million.
In a post that was shared on April 23, Melker described feeling ”sick” after being informed by a private investigator that a Nigerian scam group impersonated him with a fake driver’s license and an email account designed to appear legitimate. The fraudsters even went as far as conducting sophisticated Zoom calls with AI avatars, and allegedly spoofed the identities of Melker’s wife and children to make their deception look more legit.
Melker explained that the group scammed multiple people by using generative AI to create highly convincing identities and interactions. This is very similar to other incidents across the crypto space. Technical analysis group TheChartGuys reported a comparable case where scammers used deepfake voice technology to impersonate them. This led one victim to lose $5,000.
While the tools that were used by these scammers are becoming increasingly advanced, not all of their tactics are flawless. Crypto trader and advisor “Nebraskan Gooner” shared that some of the AI-generated fake IDs had noticeable errors in formatting, which could be spotted with a basic internet search. He is quite shocked that such a well-organized operation could still produce documents with clear mistakes.
On the bright side, the wave of AI-enabled fraud is not going unnoticed by authorities and industry experts. In March, California’s Department of Justice announced the emergence of seven new crypto scam formats taking advantage of artificial intelligence.
Meanwhile, Microsoft also weighed in on the issue, and stated in a recent report that malicious actors are using AI to enhance their social engineering tactics. The software giant warned that AI tools are being employed to scrape the web for personal and corporate data, which scammers then use to construct highly believable lures and targeted attacks.
Melker acknowledged the worrying trajectory. “It’s going to get exponentially worse, I would imagine,” he said. He is now one of many crypto personalities getting more worried about generative AI that blurs the lines between real and fake.
Celsius Victims Plead for Accountability
Even years after a crypto fraud case, victims still struggle to find some justice. Federal prosecutors recently submitted over 200 victim impact statements in the case against Alex Mashinsky, the founder and former CEO of the now-defunct crypto lending platform Celsius Network.
According to a letter that was filed on April 23 by interim US Attorney for Manhattan Jay Clayton, the statements span 418 pages and outline the emotional and financial toll the platform’s collapse had on hundreds of victims. Many users recounted trusting Mashinsky’s repeated assurances that Celsius was a safe place to store their digital assets, only to lose very large portions of their savings.
Alex Mashinsky
Celsius once offered crypto yield accounts and loans collateralized by cryptocurrency, but stopped withdrawals in mid-2022 amid a broader crypto market meltdown before filing for bankruptcy in July of that year. Mashinsky was indicted in July of 2023 and later pleaded guilty to commodities and securities fraud in December. He faces up to 30 years in prison if the sentences are applied consecutively.
(Source: X)
While most of the submitted statements call for the harshest possible sentence, a minority have asked for leniency. One letter from a person named “Mike” claimed without evidence that Mashinsky was targeted in a coordinated attack led by FTX founder Sam Bankman-Fried. Another, from Artur Abreu, argued that macroeconomic factors played a big role in Celsius’ downfall and urged the court to consider Mashinsky’s remorse.
Mashinsky himself asked for a sentence of no more than one year and one day. His sentencing is scheduled for May 8, while the government's formal sentencing recommendation is expected on April 24.