State securities regulators across North America are facing an unprecedented surge in technology-driven investment fraud as digital assets and social media scams reach record levels, according to a new report by the North American Securities Administrators Association (NASAA).
The report reveals that regulators in the U.S, Canada, and other North American countries initiated 8,768 active investigations in 2023, with cryptocurrency and online-based schemes emerging as the primary threats to retail investors. Cryptocurrency-related fraud was a significant focus, with 343 new investigations launched, excluding cases involving staking and NFTs. Additionally, 144 cases specifically targeted crypto-staking operations. Social media-driven investment scams accounted for 205 new cases, a sharp increase from 2022.
NASAA President Leslie Van Buskirk highlighted how bad actors use technology to mislead investors, particularly through social media.
“Bad actors leverage the innovation and connectivity of technology to deceive investors,”
Van Buskirk stated.
In 2023, enforcement actions led to over $333 million in penalties and restitution orders. Courts handed down 461 years of incarceration and 227 years of probation for offenders. Additionally, regulators revoked 52 licenses and barred 86 individuals and firms from operating within the industry.
Senior financial exploitation also saw a sharp rise, with 3,481 complaints involving older investors. State regulators took 131 enforcement actions, impacting nearly 3,000 seniors. The NASAA Model Act, adopted by 43 states and territories, played a key role in combating elder exploitation, with reports of suspected abuse jumping from 500 in 2017 to 4,291 in 2023.
Notably, Ireland’s national police force issued a similar warning about a surge in cryptocurrency-related investment fraud. According to the Irish Independent, 44% of all investment fraud cases in Ireland between January 2020 and August 2024 involved Bitcoin and other cryptocurrencies. During this period, scammers stole over €75 million from 1,117 victims, with €13.5 million lost in 2024 alone. Losses peaked in 2023, when fraudsters stole €28 million, surpassing the combined totals of 2021 and 2022.
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