ICBA expert calls for targeted approach to combat crypto scams

Cryptocurrency scams are proliferating globally and can be prevented by due diligence, said Brian Laverdure, Independent Community Bankers of America senior vice president of digital assets and innovation policy. .Speaking on the second day of Independent Community Bankers of America LIVE in San Diego, Laverdure said victims 60 years or older suffered the highest total losses from crypto scams and filed the most claims. Nearly 60 percent of crypto-related scam losses were attributed to investment scams. Scammers, through manipulation, convince victims to deposit more money into fraudulent financial investments using crypto, Laverdure said. In reality, all that money is under the control of and stolen by criminals, usually overseas, leading to victims losing all of the money. Another scam involves scammers convincing victims to move money to an exchange, at which point it is converted to crypto and moved to a wallet. Laverdure suggested banks run reports on ACH and card transactions to decipher the crypto activity customers engage with. Frontline staff should be educated about common red flags, know how to ask the right questions and alert the appropriate bank channels, he added. Victims should report fraud to the Federal Trade Commission and the Internet Crime Complaint Center, he added. Laverdure cited common red flags of a crypto scam, including demanding to pay tolls, bail, tech support or other services only in digital currency; and offering investment returns seemingly too good to be true. Crypto owners are more susceptible to scams and losses, he added. “We need to be much better about educating consumers to just stop and think,” he said.Laverdure’s report came as illicit financial activity has surged, according to Nasdaq Verafin’s 2026 Global Financial Crime Report. Released March 11, the report found illicit financial activity surged by $1.3 trillion since 2023, to an estimated $4.4 trillion. “With a compound annual growth rate of 19.2 percent over two years, this growth in the scope, scale and evolution of financial crime fundamentally threatens the integrity of the financial system, powering insidious and destabilizing crimes such as human trafficking and terrorism,” according to the report. Victims reported losing $9.3 billion in crypto scams, according to a 2024 report from the Internet Crime Complaint Center. Laverdure estimated actual estimates as being four-to-five times as high. Scammers bilked victims out of $14 billion in on-chain payments last year, according to blockchain data and analytics Chainalysis.Sextortion — where a criminal extorts money or sexual favors from someone by threatening to release intimate videos, images of information — has increased 55 percent since 2023, with most claims by victims 20-29 years old, Laverdure said.The United Nations estimates 300,000 people, mainly younger residents of subsaharan Africa and Asia, have been lured to Southeast Asia and forced to conduct scams by transnational criminals, Laverdure said. In October, the U.S. Department of the Treasury’s Office of Foreign Assets Control declared Cambodian financial conglomerate Huione Group a primary money laundering concern, severing it from the domestic financial system. The company allegedly laundered $4 billion in illicit proceeds in less than four years, including $300 million from cyber scams.The U.S. government has also established the Scam Center Task Force, which is headed by U.S. Attorney Jeanne Pirro. In March, the Task Force announced $580 million had been seized from scammers in the group’s first three months, which Laverdure said only represents a “drop in the bucket” to the massive amount of fraud in the system.