Americans aged 60 plus lost over $1.6B to crypto scams in 2023, says FBI — here’s how to spot it now and protect your retirement savings

Common cryptocurrency scams

Crypto scams take many forms, but an FBI report shows which types of fraud caused the biggest losses. Some of the most common scams include:

• Fraudulent investments, which caused over $3.96 billion in losses among all victims.
• Phishing or spoofing, which caused an estimated $9.6 million in financial loss

It's not surprising fraudulent investments are the leading cause of loss. A growing number of people wanting to diversify into crypto can easily be led astray — especially older adults who may not be familiar with the terms blockchain, which facilitates the development of many digital currencies.

Fraudulent investment could take the form of fake initial coin offerings (ICOs), where scam victims are enticed to buy a currency that ends up having no value. Fake digital wallets are also a common issue, with scam victims falsely believing that they're storing their digital currency securely when in fact they're giving their private keys to criminals who steal their coins.

Phishing and spoofing, conversely, are scams where people are tricked into sharing personal or financial details, believing they are interacting with a legitimate company when they actually aren't.

Unfortunately, older adults may be vulnerable to these common scams if they're behind on retirement savings and hoping a hot new investment could make it easier for them to catch up.

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How older adults can avoid falling prey to fraud

Older Americans, and especially those on a fixed income, simply can't afford to lose billions to crypto scams. Fortunately, there are techniques retirees can implement to make sure this doesn't happen to them.

Some ways to avoid being victimized include:

• Doing independent research before making an investment. Avoid trusting celebrity endorsements or aggressive sales techniques.
• Watch for false promises. If something seems too good to be true, it very likely is.
• Don't rush into buying any cryptocurrency. FOMO, or the fear of missing out is real, but there's no legitimate investment that pressures you to buy right away.
• Work with reputable companies. If you want to invest in cryptocurrency, work with a trusted company with a proven track record and consider buying well-known digital currencies like Bitcoin, rather than venturing into more uncertain territory
• Not giving out personal or financial information. Don't respond to emails or phone calls by providing your details. Instead, if you get a call from a business that wants your details, hang up, look up the company's real phone number online, and call back to make sure the first contact was legitimate

Of course, you can avoid cryptocurrency scams entirely by steering clear of the market. Most older adults should err on the side of caution in their investments because of their short timeline. Putting money you may need soon into an asset as volatile as cryptocurrency is just asking for trouble, even if the coin you buy is legitimate.

Instead of risking your investment, stick with a tried-and-true approach of putting your money into the U.S. stock market and, hopefully, watching it grow slow and steady over time.