Crypto Scam Revenue Slips 65% in 2022 Due to Economic Downturn

The revenue of crypto scams fell down to $1.6 billion this year, which is 65 % lower than its levels in July, 2021, as the price of cryptocurrency declined, as shown by a new report. 

The scam revenue decline was largely with Bitcoin prices from the month of January, 2022. Chainalysis, the blockchain data firm said. Bitcoins are currently trading at $23,451, that is down from its all-time high of $68,500 in November, 2021. 

It is not the scam revenue that drops out individuals who transfer scams at the lowest level in the last four years, as it suggests that few people are becoming crypto fraud victims, as per the report of Chainalysis 2022, Crypto Crime Report. 

Cybercrimes research lead at Chainalysis, Eric Jardine said explanation could be fall in the asset prices that made fraud schemes. It usually entices crypto fraud victims with higher returns and less alluring, substantially. 

Another reason told by Jardine is that there could be fewer inexperienced people in the crypto market now when prices are increasing, that led people to fall for criminal schemes amid the promise and hype of quick gains. 

Crypto currency fraudsters and thefts rose to $1.9 billion in July 2022 from $1.2 billion in july 2021, said by Chainalysis. 

Eric Jardine noted that cryptocurrency thefts should not be expected to drop down based on current prices of cryptocurrency. As cryptocurrency and other assets held in decentralized finance or DeFi protocol pools and other services have value and become vulnerable, bad actors will steal them, as he said. 

“The only way to stop such cybercrime frauds is for the industry to educate and shore up security consumers to find safe projects for the investment. Law enforcement must continue developing the ability to seize the stolen cryptocurrency to point out that hacks are not far worthwhile,” as he added. 

The attack of $190 million on a cross-chain bridge named as Nomad and a $5 million hack of a number of Solana wallets occurred in the initial week of August. The trend does not change any time soon, Eric Jardine said. 

It is due to the increase in startling finds that are being stolen from the protocols of DeFi, a trend started in 2021. 

Moreover, North Korean-affiliated cyber thefts and criminals, particularly the top-tier hackers, are responsible for a large portion of value taken from DeFi protocols. As per the calculations of the firm, entities connected to North Korea stole $1 billion worth of cryptocurrency from DeFi protocols, 2022.