The Revenue from Cryptocurrency Scams Dropped by 65% in 2022

The Revenue from Cryptocurrency Scams Dropped by 65% in 2022

The total scam revenue is estimated at USD 1.6 billion, which is 65% lower than last year. Chainalysis has found that illicit crypto volume is down this year.  "Those numbers suggest that fewer people than ever are falling for cryptocurrency scams," the blockchain data analytics firm reports.

Data Shows a Drop in Illicit Crypto Volumes

Blockchain data analytics firm Chainalysis published its mid-year crypto crime report titled "Illicit Activity Falls with the Rest of the Market, With Some Notable Exceptions" on Tuesday. The firm reports,

"Illicit volumes are down 15% year over year, compared to 36% for legitimate volumes."

Specifically, "Total scam revenue for 2022 is currently estimated at USD 1.6 billion, 65% lower than where it was through the end of July 2021, and this decline appears linked to declining prices across different currencies," Chainalysis noted.

"The cumulative number of individual transfers to scams so far in 2022 is the lowest since the past four years," the firm added. Chainalysis reports, 

"Those numbers suggest that fewer people than ever are falling for cryptocurrency scams. One reason for this could be that with asset prices falling, cryptocurrency scams … are less enticing to potential victims."

The firm noted that no scams identified in 2022 touched the level of Plustoken or Finiko. The former netted over USD 2 billion from victims in 2019, while the latter netted over USD 1.5 billion in 2021.

In addition, darknet market revenue is significantly down this year and is currently 43% lower than in July 2021. An area where illicit activity is increasing in 2022 is hacking and stolen funds. The blockchain analytics firm described:

"Through July 2022, USD 1.9 billion worth of cryptocurrency has been stolen in hacks of services, compared to just under USD 1.2 billion at the same point in 2021."

"This trend doesn’t appear set to reverse any time soon, with a USD 190 million hacks of cross-chain bridge Nomad and USD 5 million hacks of several Solana wallets in the first week of August," Chainalysis added. "Much of this can be attributed to the stunning rise in funds stolen from defi (decentralized finance) protocols, a trend that began in 2021."