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The FBI has been reaching out to people who fell for cryptocurrency investment scams in an effort to intervene before more of their money is lost.
The agency has so far notified more than 4,300 victims across all 50 US states since it began “Operation Level Up” over a year ago. “Of these victims, 76% were not aware they were being scammed,” the agency said in an announcement on Thursday.
The operation is the US’s latest attempt to crack down on scammers who use SMS texts, social media, and the internet to build rapport with unsuspecting users and trick them into investing in fake cryptocurrency. The scams, also known as pig butchering, have raked in billions, often for fraudsters based in China, according to James Barnacle, an FBI deputy assistant director.
(Credit: Velishchuk via Getty Images)In response, the US agency has been identifying victims through its investigations and then contacting them through email and phone calls.
"Specially trained FBI and United States Secret Service agents are calling victims directly to prevent further victimization and financial loss," Barnacle told reporters. The notification efforts have saved victims an estimated $285 million. In addition, the FBI also worked with international law enforcement agencies to notify another 500 foreign victims.
“We want everyone out there to know, if the FBI contacts you, we’re doing so to get you to stop giving money,” he said. “We want you to take a beat, to slow down, to not give more money to anyone you don’t know.”
To avoid tipping off the scammers, Barnacle didn't reveal too many details about how the FBI identifies victims. But in general, the agency partners with social media companies and blockchain-monitoring firms to pinpoint where fraud proceeds are going. “And we kind of work it backward and identify victims that way,” he said.
The scams target Americans across all demographics. However, the FBI noted the malicious schemes have been hitting Asian Americans more frequently, likely due to the fraudsters sharing common languages. Most victims also range in age from 30 to 60. "They are tech-savvy, they are sophisticated, and they are still getting caught,” Barnacle said.
The scams often arrive as random SMS texts or social media messages that pretend to come from a friendly stranger. In other cases, fraudsters will buy ads online focused on cryptocurrencies. The culprits will then entice victims to invest in a cryptocurrency, promising huge returns. But in reality, it’s all a ruse to swindle their funds, even if the victim has little knowledge about how to use cryptocurrencies. In some cases, the fraudsters will trick the person into making a bank wire transfer, or they'll send a car to pick up their cash from their home.
The scams can have devastating consequences. “In numerous instances, victims told the FBI that our efforts through Operation Level Up stopped them from liquidating their entire retirement accounts or selling their homes,” Barnacle said.
“Some victims reported they were investing to help pay for their cancer treatments,” he further noted. “Dozens of victims contacted were also referred to victim services and provided direct support such as suicide intervention.”
Barnacle added that the cryptocurrency investment scams may have raked in as much as $5 billion last year, although the FBI is still finalizing its crime stats for 2024.
Although the agency is trying to be proactive in stopping the scams, the public should also be on guard against fraudsters trying to pose as FBI agents or US government officials.
“The FBI will not ask you for any money or personal information,” Barnacle added. “We will not ask to move the conversation to an encrypted platform or application. We will not ask to safe-keep your money for you.”