Last year was less profitable for cryptocurrency scammers, as their revenue fell nearly 50% by 2022, according to a new study from blockchain analytics firm Chainalysis.
The Blockchain Company noted that the decline in revenue could be related to the decline in value of cryptocurrencies due to the correlation of most scam types with the bitcoin price.
Crypto scam revenue dropped to $5.9 billion in 2022
Crypto scam revenue started 2022 on an upward trend, but spiraled downward in May at the start of the bear market following the collapse of the Terra ecosystem. It maintained the downward movement until the end of the year.
From a record high of $10.9 billion in 2021, cryptocurrency scam revenue fell to $5.9 billion. Due to the relationship between various types of heists and bitcoin’s price movement, victims were reluctant to spend their funds as the asset further collapsed.
It should be noted that most of scams in 2022 they were investment types and, as a category, generated the most revenue last year despite the overall decline. On the other hand, romance scams it maintained a different revenue pattern and had no dip, despite having lower overall revenue as a category.
Romance scams, which involve building emotional ties with victims and enlisting their help after a while, had the most devastating revenue-per-victim record. With an average victim deposit of approximately $16,000, they outperformed the next closest category three times.
“The reason for the difference probably lies in how the scams are delivered to the victims. Investment scams typically promise users outsized investment returns, often based on an algorithmic, “can’t lose” trading strategy. That launch is likely to be more successful when asset prices are rising, and the news is full of stories of crypto investors getting rich,” Chainalysis said.
The same groups control most crypto scams
The blockchain analytics firm also found that most of the scams appeared to be controlled by the same people or groups.
The study described patterns of scams receiving significant amounts of funds from other illicit addresses, indicating a link between the entities.
In particular, more than 200 fraudulent websites contained identical information related to some entities sanctioned by the Commodity Futures Trading Commission (CFTC).
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