As crypto continues on its mainstream journey, seemingly with each passing day, a growing mountain of evidence suggests that cybercriminals are now zeroing in on a particularly vulnerable section of digital asset owners, i.e., senior citizens. From investment scams to impersonating fake romances, bad actors are increasingly leveraging the anonymity of digital assets to drain the life savings of older Americans.
In fact, the trend has become so pronounced that it has garnered the attention of several prominent intelligence and security agencies recently, including the Federal Bureau of Investigation (FBI). According to the bureau's latest Elder Fraud Report, scamming the elderly has already transformed into a billion-dollar industry.
To elaborate, the authors suggest that during 2023 alone, the total reported losses by victims over the age of 60 topped $3.4 billion—up nearly 11% from the year prior. A whopping $1.6 billion of these losses were specifically linked to the use of cryptocurrencies like Bitcoin, Ethereum, Ripple, Solana, etc.
Moreover, investment frauds targeting the elderly accounted for over $1.2 billion in combined losses. Of this figure, an astonishing $716 million was linked directly to cryptocurrencies. According to the FBI's research team, crypto's anonymizing features make it easier for scammers to execute tactics like pump-and-dump schemes while covering up the money trail.
Lastly, it bears mentioning that over the past 16 months, the FBI has received over 15,000 crypto-centric complaints from senior citizens. Of these, romance scams and tech support impersonation scams—where criminals form trusting bonds before pressuring people to send money via crypto ATMs or apps—were quite prominent.
Hunting Down the Hunters
As the aforementioned scam situation continues to worsen, many companies within the crypto realm are continuing to combat these growing ills. One company, for instance, that is committed to protecting the elderly and their hard-earned crypto assets is the Lionsgate Network, an Israeli startup founded by cybersecurity experts on a mission to recover digital assets stolen through scams and fraud.
Led by CEO Bezalel Eithan Raviv, a former member of the elite IDF cyber intelligence unit 8200, Lionsgate's team of blockchain analysts uses cutting-edge cryptocurrency tracing and forensics to hunt down illicit crypto wallets and funds.
"Crypto scams are increasingly targeting elderly Americans because they often lack familiarity with digital currencies and the underlying technology, making them more vulnerable to sophisticated fraud schemes," says Raviv. "The complexity of cryptocurrency transactions can be confusing for older adults, making it easier for scammers to exploit their trust and financial naivety."
While the realm of blockchain forensics is highly technical, Lionsgate offers its clients a seamless means of recovering their assets. To elaborate, once the compromised wallets have been pinpointed, the platform works rapidly to legally freeze funds before they can be further laundered by fraudsters. The processes are designed to preserve important aspects such as 'chain of custody' and 'court admissibility,' ensuring that the recovered money gets returned through proper legal channels.
To date, Lionsgate's techniques have produced several tangible results. In a recent high-profile case, the firm revealed that it had assisted Israel's ongoing counterterrorism efforts in the Middle East by identifying and freezing around $90 million in crypto wallets linked to the Iran-backed militant group Hamas.
A Unified Front to Protect the Vulnerable
While it may be fairly obvious to everyone that recovering stolen assets after the fact is just part of the solution, raising public awareness, especially among senior communities, is critical to preventing crypto frauds from occurring in the first place. This is exactly the reason why companies like the Lionsgate Network are actively collaborating with law enforcement agencies, consumer protection groups, and regulators. On the subject, Raviv noted:
"Education is crucial in the war against scammers because when individuals are aware of scams, scammers cannot succeed and individuals with the knowledge to recognize and avoid fraudulent schemes, significantly reducing their risk of becoming victims. Essentially, education brings awareness which prevents the need for future recovery."
Therefore, as digital assets continue to be adopted at a rapid rate globally, defending vulnerable populations will require a unified public-private partnership between specialists, authorities, and consumer advocates. Only then will it be possible for all of the relevant stakeholders to stay ahead of the curve and adapt to the ever-evolving tactics of the miscreants operating within this space. Interesting times ahead, for sure.
