Bank Secrecy Act reports flagged approximately $12.7 billion in suspected digital asset investment scam activity during a roughly two-year period beginning in 2023, showcasing the extent of the problem, according to a Financial Crimes Enforcement Network analysis released today. FinCEN also published a related alert for financial institutions on overseas digital asset investment scam centers.
Digital asset investment scams, such as romance scams, are sophisticated fraud operations that use fake personas and social engineering tactics to manipulate victims into transferring funds to fraudulent digital asset investments, according to FinCEN. The agency reviewed nearly 34,000 BSA reports involving suspected investment scams and found scam activity grew significantly during the review period. The number of BSA reports about suspected investment scams grew by an average of 10.9% month-over-month, while scam-related financial activity grew an average of 18% month-over-month.
More than half of BSA reports examined by FinCEN were filed by money services businesses, which accounted for $5.5 billion in financial activity. Roughly 41% of reports were filed by depository institutions, accounting for $6.4 billion in activity.
“Digital asset investment scams pose one of the most significant fraud threats facing Americans today,” said Gene Lange, who is currently performing the duties of undersecretary for terrorism and financial intelligence. “The transnational criminal organizations behind these scams exploit both emerging technologies and human vulnerabilities, resulting in devastating financial losses for innocent American victims.”
The related alert lists red flags to help financial institutions detect, prevent and report suspicious activity connected to overseas scam centers responsible for the fraud. “BSA reporting is essential to supporting law enforcement investigations and victim recovery efforts,” the agency said.
