What are Cryptocurrencies?

Cryptocurrencies are digital tokens. The "crypto" in cryptocurrencies refers to the cryptographic techniques that allow for creating and processing digital currencies. Cryptocurrencies are intended for payments, transmitting value (akin to digital money) across a decentralized network of users. Cryptocurrencies have no legislated or intrinsic value; they are simply worth what people are willing to pay for them in the market. Some examples, although not exhaustive, of cryptocurrencies include the following:

Bitcoin (BTC)

Binance Coin (BNB)

Ethereum (ETH)

USD Coin (USDC)

Tether (USDT)

Cardano (ADA)

Dogecoin (DOGE)

Solana (SOL)

Ripple (XRP)

Tron (TRX)

Why Do Criminals Utilize Cryptocurrency to Conduct Illicit Transactions?

Decentralized Nature

Cryptocurrency is decentralized and distributed, which can offer a secure method to transfer value. Today's market includes thousands of cryptocurrencies users can transfer around the globe in exchange for goods, services, and other cryptocurrencies. Since cryptocurrencies eliminate the need for financial intermediaries to validate and facilitate transactions, criminals can exploit these characteristics to support illicit activity such as thefts, fraud, and money laundering.

Irrevocable Transactions that Move Quickly

A cryptocurrency transfer can occur anywhere. The only requirements for transmitting funds from a particular address is the associated private key (which functions like a password or a PIN) and an Internet connection. Third parties do not sit between, or authorize, transactions and transactions are irrevocable — meaning they cannot be reversed. Criminal actors connected to the Internet from anywhere in the world can also exploit these characteristics to facilitate large-scale, nearly instantaneous cross-border transactions without traditional financial intermediaries that employ anti-money laundering programs.

Challenges to Following Funds

Cryptocurrency transactions are permanently recorded on publicly available distributed ledgers called blockchains. As a result, law enforcement can trace cryptocurrency transactions to follow money in ways not possible with other financial systems. Nevertheless, since cryptocurrency also allows transfers of funds to exchanges overseas, US law enforcement may encounter significant challenges when following cryptocurrency that enters other jurisdictions, especially those with lax anti-money laundering laws or regulations.

What to Do If You Were the Target of a Cryptocurrency Scam?

The FBI encourages the public to submit a complaint through this website, even if a financial loss did not occur. Some of the most important information you can provide are details related to transactions. For cryptocurrency transactions, these details include cryptocurrency addresses; the amounts and types of cryptocurrencies; transaction hashes; and the dates and times of the transactions. If possible, please provide any other information you may have about the scam. These details may include how you met the scammer, what platforms you used to communicate, any web domain involved in the scheme, and any phone numbers or other identifiers. Be wary of cryptocurrency recovery services, especially those charging an up-front fee.