WASHINGTON, DC – Today, Better Markets released a fact sheet on the growing fraud at the heart of the crypto industry. The release comes as the crypto industry holds its second annual “Stand With Crypto Day” to pressure members of Congress to advance the industry’s favored legislation, which would rewrite the rules around crypto regulation. Yet just last week the FBI released a report detailing more than 69,000 complaints regarding financial frauds involving crypto in 2023, with estimated losses totaling $5.6 billion.
“The FBI’s report is astounding,” said Benjamin Schiffrin, Director of Securities Policy. “It reveals that crypto frauds are on the rise and were most prevalent in investment scams, where losses accounted for almost 71% of all losses related to crypto. These losses from crypto investment fraud schemes rose from $2.57 billion in 2022 to $3.96 billion in 2023, an increase of 53%. The FBI’s report also notes that these schemes target retail investors who seek to profit from investing but are unfamiliar with crypto’s risks.”
“Our fact sheet further highlights three SEC cases from this year alone that demonstrate the extent to which crypto frauds ensnare retail investors. One case involved a fraudulent scheme that raised $1.7 billion from investors worldwide. The second case involved a fraudulent scheme that raised more than $300 million from over 40,000 investors. And the third case involved a fraudulent scheme that raised more than $650 million from more than 200,000 investors. All three cases targeted retail investors, and two of the three cases targeted minority communities—Latinos in one case and Haitian Americans in the other. This is just more evidence of crypto’s devasting impact on vulnerable minority populations.”
“The unfortunate reality is that standing with crypto often means standing with fraudsters who scam hundreds of thousands of retail investors and cause billions of dollars in losses.”
You can find the newly released fact sheet here and Better Markets’ work on crypto here.
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.
