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Surging Crypto Crimewave Should be a Congressional Wake up Call
By Mark Hays
Last week, the FBI reported that online crypto crime continues to surge and is taking a bigger bite out of people’s pockets than ever. Its annual report on internet based financial crime found that people lost $21 billion to online financial crime in 2025, a 26 percent increase from last year. And, crypto is at the center of this crime wave.
The report analyzes data on financial crime from hundreds of thousands of complaints, and is a key measure of the scope and scale of online financial crime in the United States. By every measure, and every year since 2020 there have been multi-billion dollar increases in losses due to online financial crime.
Crypto criminals steal billions
Over half of these losses — $11 billion — were linked to crypto. Out of 15 different types of financial crime tracked by the FBI — ransomware, phishing scams, identity theft, and more — crypto was a vector used by scammers in all of them. Survivors lost an average of $62,000; many lost much more. And while people of all ages reported losses from crypto-related scams, those over 60 suffered the greatest losses, to the tune of $4.4 billion in 2025.
Crypto’s role here is not just broad, but deep. Scams where survivors are tricked into putting money into fake crypto investment schemes stole $7.2 billion from people in 2025 and were the single largest sources of reported losses. This means that, while scammers of all stripes use crypto as a convenient way to rip people off, a major driver of losses from crypto crime is the allure of crypto investing itself.
And, the FBI report doesn’t capture the full story; financial crime losses are grossly underreported. A recent Consumer Federation of America report estimated that the true cost of online scams in the United States was at least $119 billion in 2024, if not far greater. The FBI report also doesn’t appear to capture a range of other crypto related crimes. For example, the crypto analytics firm Chainalysis reported at least $3.4 billion was lost due to crypto hacks alone in 2025. These figures also don’t account for crypto’s role in laundering illicit funds from narcotics and human trafficking as well as by rogue states evading sanctions, a figure that increased nearly 700 percent in 2025 to $154 billion.
Administration’s gives a get out of jail free card to crypto ripoffs
You would think federal regulators would respond aggressively to stem the tide of this epidemic and hold industry actors accountable. Instead, the Trump administration has eviscerated federal crypto industry oversight. For example, the Securities and Exchange Commission has dismissed a slew of cases against crypto firms and pushed through new regulatory guidance that rewards some of the crypto industry’s shadiest practices. Federal banking regulators are rapidly approving generous banking charters to crypto firms, running roughshod over core banking regulatory principles. And, the president has pardoned crypto moguls convicted of significant crimes related to illicit finance, even as the president’s family makes lucrative crypto deals with these same figures, garnering them billions.
Congressional giveaway abets crypto criminals
Congress is poised to make it worse. The Congress has been pushing loophole-ridden legislation crafted by and for the crypto industry that fails to address surging crypto crime. And since the legislation would effectively give a congressional seal of approval to crypto, people would be more vulnerable to crypto scams and ripoffs.
The legislation is deeply flawed. It fails to prevent Trump’s billion dollar plus crypto corruption; it locks in weak oversight that will expose investors to losses and ripoffs; it will amplify crypto’s role in global money laundering; it will expose the financial system and the real economy to crypto’s endemic volatility, fraud, and risk; and it fails to protect people from the $11 billion and rising crypto crimewave.
And the legislation prevents state regulators from protecting people from scams and undermines people’s right to sue crypto platforms for failing to protect investors and state regulator’s powers to protect them. State regulators have been a critical bulwark protecting crypto investors and consumers, pursuing and successfully enforcing hundreds of cases against bad crypto actors for more than a decade. The bill preempts state securities, banking, and consumer protection regulators from protecting people even as the administration has totally capitulated to the crypto industry.
Unless Congress stands firm against the industry’s immense political pressure, crypto crimes and losses will only get worse. People lost $11 billion last year — about what they spent online on Black Friday. That should be a wake up call to Congress.
Updates
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Statement: Mark Hays, AFR and Demand Progress Associate Director, Crypto and Fintech, on new FBI Annual Report on Internet Financial Crime Losses to Crypto and other Scams
Yesterday, the FBI’s Internet Crime Complaint Center (IC3) released its annual Internet Crime Report, which analyses complaints received from online financial crime survivors each year to determine the scope and scale of such criminal activity and who is most impacted by it.
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Letters to the Regulators: AFREF Opposes Effort to Give Crypto, Fintech, and Big Tech Platforms New Bank Charters
AFREF submitted comments opposing the Office of Comptroller of the Currency’s effort to grant novel bank charters to cryptocurrency, financial technology, and Big Tech platforms. Congress never intended for national bank trust charters to be used by any company that wanted one. The creation of new bank charters ignores congressional intent, violates federal banking law, and contravenes a century…
AFR in the News
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Crypto Compass: Stablecoin Regulation Faces Critical Delay: Senator Reveals Compromise Draft Unlikely This Week
Consumer advocacy groups express concerns about prolonged uncertainty. Americans for Financial Reform director Alexis Goldstein states that “delays in establishing clear rules leave consumers vulnerable to potential risks.” Goldstein advocates for strong consumer protections within any regulatory framework. She argues that “well-designed regulations prevent harm while supporting responsible innovation.”
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Disrupt News: Surging Crypto Crime Wave: Why Congress Must Act Now to Protect Investors
The rapid growth of cryptocurrency has revolutionized global finance—but it has also opened the door to a surge in digital financial crime. A recent report highlighted in Americans for Financial Reform warns that rising crypto-related scams and fraud should serve as a critical wake-up call for lawmakers in Washington.
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New York Times: White House and Crypto Industry Fight Bank Lobby Over Stablecoin Income
“Before the ink was dry on GENIUS, the crypto industry started really touting and marketing ways in which people could, still, secure yield in all but name on their platforms,” said Mark Hays, the associate director of cryptocurrency and financial technology at Americans for Financial Reform, a nonprofit group pushing for stricter crypto regulation.
