The past year has been a less profitable one for crypto scammers, with their revenue dropping by nearly 50% in 2022, according to a new study by blockchain analytics firm Chainalysis.
The blockchain company famous that the decline in revenue could be linked to the fall in the value of cryptocurrencies due to the correlation of most types of fraud with the price of bitcoin.
Crypto Scam Revenue Drops to $5.9 Billion in 2022
Crypto scam revenue started 2022 on an upward trend, but fell in May with the start of the bear market after the collapse of the Terra ecosystem. It maintained the downward trend until the end of the year.
From a record $10.9 billion in 2021, crypto scam revenue has fallen to $5.9 billion. Due to the correlation between many types of heist and the movement of bitcoin prices, victims were reluctant to spend their money as the asset collapsed further.
Specifically, the majority of scams in 2022 they were investment types and as a category they generated the most revenue last year despite the overall decline. Secondly, love scams remained in a different revenue pattern and did not decline, despite having lower overall revenue as a category.
Romance scams, which involve creating emotional bonds with victims and seeking their help after a while, had the worst record of revenue per victim. With an average victim deposit of about $16,000, they outperformed the next closest category by three times.
“The reason for the difference likely lies in the way the scams target victims. Investment scams typically promise users large investment returns, often based on a “can’t lose” algorithmic trading strategy. This step is probably more likely to succeed when asset prices are rising and the news is full of stories of crypto investors striking it rich,” Chainalysis said.
The same groups control the majority of crypto scams
The blockchain analytics firm also found that most scams appear to be controlled by the same individuals or groups.
The study outlined fraud patterns that received significant amounts of funds from other illegal addresses, indicating a link between the entities.
Specifically, over 200 fraudulent websites contained identical information about certain entities that have been sanctioned by the Commodity Futures Trading Commission (CFTC).
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