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From medium to risk factor: How crypto investment elevates fraud victimization

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  • Bai, Zefeng
  • Wang, Pengcheng

Abstract

Conventional wisdom treats cryptocurrency mainly as a payment rail for illicit finance. Using newly released 2024 NFCS data (n = 16,296), we examine whether crypto ownership elevates fraud risk. Through empirical analysis, we find that crypto investors are twice as likely to report being targeted by scams and to incur financial losses from fraud, relative to non-crypto investors. These findings shift the narrative from viewing cryptocurrency as a neutral channel for financial transactions to recognizing it as a risk amplifier that significantly increases the likelihood of fraud victimization. Our findings inform investor protection and regulatory design in digital asset markets.

Suggested Citation

  • Bai, Zefeng & Wang, Pengcheng, 2025. "From medium to risk factor: How crypto investment elevates fraud victimization," Finance Research Letters, Elsevier, vol. 86(PC).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pc:s154461232501846x
    DOI: 10.1016/j.frl.2025.108592
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