Crypto Scams Continue to Rise in the U.S. — to Protect Themselves, Account Holders Need More Financial Education, Says InvestiFi.

Crypto scams are surging across the U.S., with the FBI’s latest cryptocurrency report revealing that Americans lost a staggering $5.6 billion in 2023—an alarming 45% increase from 2022. Older adults, particularly those over 65, were hit hardest, collectively losing more than $1.6 billion. California bore the brunt of these losses, recording the highest state total at $1.1 billion.

The FBI is working to proactively warn victims about possible scams as bad actors continue to seek cryptocurrency through fraudulent investments, tech support, romance scams and employment scams. Despite this effort, evolving financial technology is still unfamiliar to investors, and a lack of financial education has made them more susceptible to crypto scams.

The latest research from InvestiFi, a company that provides digital investing solutions within the financial services industry, has found that 35% of investors rely on internet searches for financial knowledge to help manage their investments, while 25% don’t use any sources. Forty percent of 18-25-year-olds use financial influencers for their financial knowledge, and 50% of those 55 and older do not have a source for their financial knowledge, leaving them susceptible to poor investment decisions.

Kian Sarreshteh, CEO of InvestiFi, said that one of the barriers to investing for many account holders is a lack of financial literacy. The majority of investors do not have access to financial advisors due to a lack of initial funds.

“Financial institutions must adopt educational tools and resources”, added Sarreshteh. “By providing educational content such as videos, articles, webinars, or personalized insights within the digital investing platform, financial institutions can differentiate their offering from fintechs. This positions the institution as a trusted advisor that helps account holders build their financial knowledge and confidence.”

“By offering in-house financial education resources, whether through blogs, dedicated advisors, or easy-to-understand publications, institutions will fill this gap, positioning themselves as trusted, go-to sources of information. Additionally, offering personalized advice through robo-advisors or in-house experts will support those seeking guidance from independent advisors or the internet. Accessible and reliable financial education can strengthen customer relationships, improve engagement, and lead to more account holders investing and managing their finances directly within an institution’s ecosystem.”

“In the United States, it’s common for financial institutions to require a minimum of $25,000 to access a financial advisor,” Sarreshteh continued. “However, the majority of people interested in investing don’t meet this threshold, creating a gap where many potential investors are left without guidance, potentially leading them to third-party apps or independent influencers.

“Financial institutions have an opportunity to bridge this gap by offering accessible, low-barrier investment options. With the addition of digital investing solutions, educational resources, and entry-level investment tools, individuals with smaller portfolios will be empowered to start investing confidently. Account holders also gain the financial education to make safe investment decisions and avoid unnecessary losses,” concluded Sarreshteh.