Chainalysis: Crypto Scam Revenue Dropped 46% in 2022

Cryptocurrency scam revenues have fallen 46% in 2022, according to analytics firm Chainalysis. “We attribute much of this decline to market conditions as fraud performance tends to deteriorate when cryptocurrency prices fall,” the firm explained.

“Cryptocurrency scam revenues have dropped significantly in 2022”

Last week, blockchain data analysis firm Chainalysis published its 2023 Crypto Crime Report with a section on crypto fraud. “Crypto scam revenues fell 46% in 2022,” the 109-page report says, which elaborates:

Crypto fraud revenue has dropped significantly in 2022, from $10.9 billion a year earlier to $5.9 billion.

Chainalysis monitors several types of crypto scams, including free giveaway scams, impersonation scams, investment scams, non-fungible token (NFT) scams, and romance scams.

Noting that its numbers are a “lower estimate,” the blockchain analytics firm clarified that “estimates of the true amount lost by fraudsters will rise as we identify more addresses associated with fraud.” The firm specifically mentioned the “pig butchering” scam, which has become alarmingly popular. The Federal Bureau of Investigation (FBI) has repeatedly warned about this type of crypto scam. Last November, US authorities confiscated seven domain names used by scammers involved in butchering pigs.

Annual income from cryptocurrency fraud from 2017 to 2022. Source: Chainalysis.

In regards to declining crypto fraud revenue, Chainalysis went into detail:

We attribute much of this decline to market conditions as fraud performance tends to deteriorate when cryptocurrency prices fall.

“Crypto scam revenues rose early in the year but plummeted in early May — the same time that the bear market began after the Terra Luna crash — and then steadily declined throughout the rest of the year,” Chainalysis described.

Noting that “in some types of scams, revenue changes increase as crypto asset prices decline,” the blockchain analytics firm pointed out, “Fraud revenues throughout the year track almost perfectly with the price of bitcoin, consistently maintaining a three-week lag between price and revenue change.”

What do you think about the 46% drop in cryptocurrency fraud revenue last year? Let us know in the comments below.

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