Crypto scammers feel the chill: Revenue drops 46% in 2022 — Chainalysis

Crypto fraud revenues have almost halved in 2022, mainly due to falling crypto asset prices, but two types of fraud have managed to remain immune.

Crypto scam revenues in 2022, including investment scams, NFT scams, and romance scams, were $5.9 billion per year, down 46% from 2021.

The data is taken from the February 16 Crime Report from Chainalysis, which attributed much of the decline in fraud revenue is due to poor market conditions, as lower cryptocurrency prices generally result in less fraud effectiveness.

Annual income from crypto fraud from 2017 to 2022. Source: Chain analysis.

However, Chainalysis has pointed to two different types of scams that have managed to remain relatively immune to price drops: romance scams and free gift scams.

“Fraud revenues throughout the year track almost perfectly with the price of Bitcoin, constantly maintaining a three-week delay between price changes and revenue changes. Asset prices are declining,” the firm explained, adding:

“For example, unlike other types of scams, romance and prank scams do not show a positive correlation with the price of bitcoin.”

Romance scams, while having a lower overall income as a category, generated the highest average victim deposit for the year – the average victim lost just under $16,000, which is almost 3x the next largest scam type.

Average loss of victims for 2022 by type of fraud. Source: Chain analysis.

Romantic scams usually involve building a relationship with the victim where the scammer convinces them that they need their help.

Chainalysis stated that these types of scams are more likely to persist when cryptocurrency prices drop because they play on victim compassion rather than greed.

“This emotional pitch is likely equally effective regardless of broader market trends because the primary goal of the victim is not to get rich quick, but rather to help someone they see as a potential romantic partner,” the firm writes.

Scammers Target Crypto Users with New Zero-Value TransferFrom Trick

Fraud in romantic relationships, and in particular “pig butchering scam”, is considered a growing concern in cryptography.

For example, an investigation in the United Kingdom released on Jan. 29 found that half of all crypto companies involved in the state’s scam were linked to pig butchering scams.

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