The FBI’s Internet Crime Complaint Center (IC3) received more than 69,000 complaints involving cryptocurrency fraud, representing a 45 percent increase in losses compared to the previous year, the Sept. 9 report said.

While these cryptocurrency-related complaints accounted for 10 percent of the total number of financial fraud complaints, they made up nearly half of all financial losses reported to the FBI.

“As the use of cryptocurrency in the global financial system continues to grow, so too does its use by criminal actors,” Michael Nordwall, assistant director for the FBI’s Criminal Investigative Division, said in the report.

According to the report, investment fraud was the most significant contributor to these losses, accounting for $3.96 billion, or 71 percent of all cryptocurrency-related losses.

The report cites investment fraud scammers who use social media platforms, dating apps, and networking sites to build trust with victims before convincing them to invest in fake cryptocurrency schemes.

These scams often involve showing victims fake profits to encourage further investments, but when the victims try to withdraw their funds, they are asked to pay additional fees or taxes, which they never recover.

Other forms of fraud, including tech support scams, government impersonation, and call center fraud, were also notable. Call center fraud represents approximately 10 percent of cryptocurrency-related losses.

An example of tech support scams is criminals impersonating customer support representatives and directing victims to pay for nonexistent services using cryptocurrency.

“The decentralized nature of cryptocurrency, the speed of irreversible transactions, and the ability to transfer value around the world make cryptocurrency an attractive vehicle for criminals while creating challenges to recover stolen funds,” Nordwall said. “Once an individual sends a payment, the recipient owns the cryptocurrency and often quickly transfers it into an account overseas for cash-out purposes.”

The rise in cryptocurrency scams has hit older Americans especially hard. While people over the age of 60 made up just 24 percent of the total complaints, they reported the highest financial losses, totaling $1.65 billion.

Younger generations were hit less hard, with those under 20 losing $14.7 million, followed by those in their 20s losing $168.5 million, those in their 30s losing $693.7 million, those in their 40s losing $843.8 million, and those in their 50s losing $901 million.

Some states were hit harder by scams than others. The top five states for cryptocurrency fraud losses were California ($1.15 billion), Texas ($411.9 million), Florida ($390.2 million), New York ($317.3 million), and New Jersey ($179.4 million).

The five least impacted were Vermont ($4.8 million), Maine ($5.9 million), North Dakota ($6.5 million), Wyoming ($7.3 million), and the District of Columbia ($8.3 million).

The report offers several tips for individuals to protect themselves from cryptocurrency scams. It emphasizes the importance of verifying the legitimacy of investment opportunities, especially when offered by people met online or through unsolicited contacts.

The FBI advises never to send cryptocurrency payments to individuals or companies without thoroughly researching them.

Additionally, people are urged to be cautious of companies claiming they can recover lost cryptocurrency, as many of these services charge up-front fees and may be fraudulent themselves.

The agency urges victims to file complaints with IC3, even if no financial loss occurred.

For further protection, victims should promptly report any suspicious activity to the IC3. The FBI emphasized the importance of timely and accurate reporting in helping law enforcement track and recover lost funds.

The North American Electric Reliability Corporation’s (NERC’s) 2023–2024 Winter Reliability Assessment (WRA) released earlier this month provides a comprehensive view of the potential challenges and readiness of the bulk power system (BPS) for the upcoming winter season.

This assessment is a crucial tool for informing industry leaders, planners, operators, and regulatory bodies about the potential risks and necessary actions to ensure reliable power supply during the winter months​​.

“This forecast again shows that our nation faces looming grid reliability challenges while demand for electricity continues to soar,” NERC CEO and former U.S. Rep. Jim Matheson said in a press release. “That’s unacceptable and should be cause for concern for all Americans. To avoid catastrophe, policymakers must recognize their role in threatening the reliability of the grid and take steps to help prevent rolling blackouts before it’s too late.”

Focus on the South

One of the key findings of the WRA is the risk of insufficient electricity supplies during peak winter conditions.

A significant portion of the North American BPS, including areas in the southern United States, is at risk because of prolonged cold snaps that can lead to high generator outages and increased demand, particularly from electric heating systems, according to the report.

The Midcontinent Independent System Operator region, which has seen an increase in available resources through new wind and natural-gas-fired generation, remains vulnerable to extreme cold-weather events, particularly in its southern areas.

These events can cause high generator outages due to inadequate weatherization or insufficient natural gas fuel supplies​​, such as was seen during outages in 2022 just before Christmas.

Similarly, the regions covered by PJM Interconnection, SERC-East, and SERC-Central are also at risk of energy emergencies during severe cold-weather events.

Despite having adequate resources for normal winter conditions, these regions’ generators are susceptible to decreases in capacity and outages under extreme conditions​​.

The assessment also highlighted the critical role of generator fuel supplies, particularly natural gas, in ensuring winter electricity demand is met.

The interconnected nature of the natural gas and electric systems means that disruptions in one can have significant effects on the other.

This was notably observed during Winter Storm Elliott, when natural gas production declines led to wide-area electricity and natural gas shortages​​.

Last Winter

Winter Storm Elliott, which struck in December 2022, was a “once-in-a-generation storm” that brought unprecedented challenges in particular to southern portions of the country serviced by federal energy utility the Tennessee Valley Authority (TVA).

The storm affected most of the eastern continental United States, bringing heavy snowfall, high winds, and freezing rain, causing widespread travel disruptions and power outages​​.

The TVA, anticipating the storm, had developed a mid-term forecast and shared it with various teams to complete cold-weather readiness actions and winter readiness certification processes, according to a post-event report the agency released in May.

Despite these preparations, the storm’s speed, its intensity, and the resulting conditions exceeded the TVA’s forecasts and efforts.

The TVA system experienced its coldest average temperature since February 1996, with lows in major cities such as Nashville and Memphis dropping to 1 degree F. Energy demand surged, resulting in the highest 24-hour electricity demand supplied in the TVA’s history on Dec. 23​​, 2022, according to the report.

The TVA team worked to increase generation and meet the soaring demand. This involved dispatching units that weren’t previously in service and executing day-ahead, real-time, and emergency purchases.

Despite these efforts, the TVA faced significant challenges. Of its 232 generating units, 38 were negatively affected, mostly because instrumentation froze. This resulted in the TVA’s nuclear and hydro assets, which weren’t affected by the extreme weather, playing a crucial role in supporting energy demand during the event​​.

The severity and scale of Winter Storm Elliott led to decreased availability of TVA-owned and contracted electricity supply and decreases in imported electricity from neighboring markets. To maintain grid stability, the TVA was forced to implement emergency procedures, directing local power companies to reduce power demand, resulting in localized interruptions. This was the first time in the TVA’s 90-year history that such measures had to be taken​​.

NERC Recommendations

NERC states that coal, another vital fuel for electricity generation in winter, also faces challenges. Although generator owners report fewer coal supply issues than they had last winter, there are concerns about coal transportation, particularly in areas affected by drought conditions that could restrict coal availability and affect generator output​​, according to the report.

Another area of concern is the growing complexity in load forecasting during winter, the report says. The electrification of the heating sector and the increase in variable solar power resources add to the unpredictability of electricity demand, making it challenging to accurately forecast and plan for peak demand conditions​​.

Recommendations by the agency include reviewing seasonal operating plans, implementing cold-weather preparations, monitoring fuel supplies, and being prepared for potential reserve deficiencies.

Additionally, regulators are encouraged to support grid operators with environmental and transportation waivers and public appeals for energy conservation​​.

Events such as winter storms Uri in 2021 and Elliott in 2022 have underscored the need for improved cold-weather preparedness and coordination between generator owners and operators and BPS operators​​, the agency added.

The assessment stresses the importance of planning and coordination to address the various challenges that could affect the reliability of the electric grid in the southern United States during the winter to keep customers warm.