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CFPB Publishes New Bulletin Analyzing Rise in Crypto-Asset Complaints

“Pig butchering” and other scams lead list of crypto-asset complaints

Washington, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) released a new complaint bulletin that highlights complaints the CFPB received related to crypto-assets. Consumers most commonly reported being victimized by frauds, theft, account hacks, and scams. Consumers also had issues with executing transactions and transferring assets between exchanges. Many consumers had issues with accessing funds in their account due to outright platform failures, identity verification issues, security holds, or because of technical issues with platforms. Poor customer service is a common theme across crypto-related complaints.

“Our analysis of consumer complaints suggests that bad actors are leveraging crypto-assets to perpetrate fraud on the public,” said CFPB Director Rohit Chopra. “Americans are also reporting transaction problems, frozen accounts, and lost savings when it comes to crypto-assets. People should be wary of anyone seeking upfront payment in crypto-assets, since this may be a scam. We will continue our work to keep the payments system safe from fraudsters targeting Americans.”

Crypto-assets are a private sector digital asset that depend primarily on cryptography and a distributed ledger (such as a blockchain) or similar technology. These assets are also commonly referred to as “virtual currencies,” “cryptocurrencies,” “crypto tokens,” “crypto coins,” or simply “crypto”.

Scammers often target crypto-assets since it can be difficult to determine the person or people behind many crypto-asset addresses, and there are a number of techniques scammers use to obscure the movement of crypto-assets to other accounts. This can make tracing crypto-assets stolen by fraudsters more time consuming for regulators and law enforcement.

As price volatility and adoption of crypto-assets has increased in recent years, there has been a similar rise in complaints received by the CFPB about these financial products. From October 2018 to September 2022, the CFPB received more than 8,300 complaints related to crypto-assets, with the majority of them received in the past two years. For about 40% of crypto-asset complaints handled since October 2018, consumers listed frauds and scams as the main issue. Various transactional issues with crypto-assets accounted for about 25 percent of complaints, while issues with assets not being available when promised made up about 16% of complaints.

The bulletin identified several common risk themes in analyzing crypto-asset complaints. Hacks by malicious actors have marred crypto-assets, and led to significant financial loss by consumers with no recourse for recovering stolen funds.

Other risks identified in the bulletin include:

  • Romance scams and “pig butchering”: Crypto-assets are often targeted in romance scams, where scammers play on a victim’s emotions to extract money. Some scammers employ a “pig butchering” technique, where fraudsters spend time gaining the victim’s confidence, trust, and romantic affection in order to get victims to set up crypto-asset accounts, only for the scammers to ultimately steal all their crypto-assets. In addition, with a lack of customer service options for many crypto-asset platforms, there are opportunities for attackers to pretend to be customer service representatives to gain access to customers’ accounts and steal crypto-assets.
  • Difficulty obtaining restitution: In situations where consumers have been defrauded, or had their account hacked, they are often told there is nowhere to turn for help. In addition, crypto-asset platforms and service providers tend to require mandatory arbitration and limit class action suits in order to use their service. Important terms for using a service can be buried in the Terms and Conditions and difficult to find on a platform.
  • Fraudulent transactions: Complaints show that some crypto-asset platforms appear only to be taking steps to verify the authority of a person to act on behalf of a customer after receiving a complaint from that customer, and often only after several escalations by that customer. Some complaint patterns, such as a scammer making hundreds of small transactions to the same wallet, suggest scammers may be aware of and purposefully evading controls to prevent money laundering and fraud.
  • Risk of identification: Some users of blockchain technology are unaware of the public nature of the ledger that records every transaction of a crypto-asset. Malicious actors may be able to link those transactions and the crypto address with a consumer’s identity or their other transactions.
  • Higher asset volatility: Especially in recent months, crypto-assets have had significantly more fluctuation in value than currency backed by governments. Some crypto-assets have gone to zero or had assets frozen by exchanges.

The CFPB is advising consumers to:

  • Beware of common scams: In addition to romance and “pig butchering” scams, other tricks used by malicious actors include merchant scams, which deliver the promise of goods or services being provided to the victim in exchange for crypto-assets, only for the victim to find out the business was fake. Both the CFPB and the Federal Trade Commission have online resources available to spot common scams. There is no government agency or financial regulator that insures crypto-assets.
  • Report suspicious FDIC insurance claims: Consumers should also be aware of websites and apps that may fraudulently suggest government endorsement or insurance protection of crypto-assets. Firms that misuse the name or logo of the FDIC or otherwise make misrepresentations to consumers about deposit insurance coverage of crypto-assets likely violate the Consumer Financial Protection Act's prohibition on deception, as noted in the CFPB’s May 2022 Circular on the topic
  • Submitting a complaint with the CFPB: Consumers having an issue with a consumer financial product or service can submit a complaint with the CFPB online or by calling (855) 411-CFPB (2372). The CFPB has been handling complaints and warning consumers on the risks of virtual currencies since 2014.

For complaints to be published in the public Consumer Complaint Database, they must be sent to a company for a response. Many virtual currency complaints are not published in the database as a result.  Complaints are often referred to other regulatory agencies for handling. The CFPB shares complaints with FTC Sentinel and makes them available to government agencies via the CFPB’s secure Government Portal.  These complaints are also available to CFPB staff for review and analysis.

Read today’s Complaint Bulletin.

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit