State Regulators Find Fraud on the Rise in Digital Assets, Social Media

"These actions led to more than $333 million in monetary fines and restitution, and criminal relief of approximately 461 years of incarceration and 227 years of probation and deferred adjudication," the report states.

Also, the report reveals state securities regulators' efforts to protect older investors.

In 2023, state securities regulators opened 1,305 investigations and filed 131 enforcement actions involving 2,869 older investors. In 2023, the top issues in investigations involving senior victims were internet and social media scams, and digital assets other than non-fungible tokens (NFTs) or staking.

The data for the report is collected via a survey of NASAA members and includes responses from 49 of NASAA's U.S. member jurisdictions.

State securities regulators also received 1,467 referrals from other agencies — with the Securities and Exchange Commission or the Financial Industry Regulatory Authority referring 608 cases. "Fraudsters often exploit the buzz that comes with innovation and technology to take advantage of investors," said Leslie Van Buskirk, NASAA President and Administrator, Division of Securities, Wisconsin Department of Financial Institutions, in a statement.

"Combine that with the many ways in which technology and social media link us together and bad actors find significant opportunities to try and rip off investors," Van Buskirk added.