Chainalysis Crypto Crime Report 2023: Trends and Insights on Crypto Scams
A comprehensive overview of the crypto scam landscape in 2022
The Chainalysis Crypto Crime Report 2023 provides an insightful analysis of the cryptocurrency scam landscape in 2022. The report reveals that crypto scam revenue dropped by 46%, falling from $10.9 billion in 2021 to $5.9 billion in 2022. In total, more than $36 billion in scam revenue has been recorded since 2017.
This decline is largely attributed to market conditions, as scams typically underperform when cryptocurrency prices are in decline. Despite the overall drop due to the bear market, some types of scams continue to grow.
- Crypto scam revenue dropped by 46% in 2022, mostly due to the crypto crash and the bear market. Nevertheless, $5.9 billion in scam revenue was still recorded.
- Top 10 scams of 2022 were all investment scams, with Hyperverse being the most successful.
- Romance scams were the most destructive on a per-victim basis, with an average victim deposit of almost $16,000, nearly triple the next-closest category.
- Scammers' preference for stablecoins over Bitcoin during bull markets might be a hedge against a potential market crash.
Scam Types and Geographical Distribution:
Different scam types vary in effectiveness depending on the geographic area of the victim. Most scam types disproportionately receive revenue from the U.S., with NFT-related scams being especially prominent. Investment scams, which generate the largest revenue, affect a broader range of countries, with Australia and parts of South America being the hardest hit.
Pig Butchering Scams: A Growing Concern
Pig butchering, a sophisticated type of crypto scam, gained media attention in 2022. These slow-burn scams involve building trust with victims over time through fake social media accounts and dating site profiles. Scammers use apps like WeChat, WhatsApp, and LinkedIn to connect with targets, perform reconnaissance to identify victims with high investment potential, and gradually introduce them to fake crypto investment websites.
Pump and Dump Schemes: A Persistent Threat
In 2022, out of more than 1.1 million tokens launched in 2022, 40,521 achieved a minimum of ten swaps and four consecutive trading days in their first week. Of these, 9,902 (24%) experienced a price decline of 90% or more in the first week, suggesting possible pump-and-dump activity.
Pump and dump schemes pose a significant risk to the crypto ecosystem, particularly for newcomers. A safer environment needs to be established through collaboration between public and private sectors to facilitate mass adoption of cryptocurrencies. Learn more about how Interlock is working to build a more secure cryptocurrency ecosystem by exploring our blog. You can also download ThreatSlayer, our security browser extension which helps prevent scams.
Source: Chainalysis Crypto Crime Report 2023