Digital asset scams to drop 46% to $6 billion in 2022, but romance scams still prevalent: Chainalysis

A report from New York-based blockchain analytics firm Chainalysis has revealed that digital asset scammers are in the same trouble as last year’s bear market.

Chainalysis revealed that scammers made $5.9 billion in 2022, down 46% from the $10.9 billion they made from their victims in 2021. Despite the decline, scams remain the largest digital asset-based crime.

Source: Chainalysis

The biggest scam in 2022 was Hyperverse, a metaverse pyramid scheme that Chainalysis said made $1.3 billion, four times more than the next biggest scam. Hyperverse sought investments ranging from $300 to $50,000 with the promise of tripling that investment.

But while investment scams grabbed headlines and topped the charts for the total amount raised, it was romance scams that did the most damage, the New York-based company says.

A romance scam is one in which the scammer feigns romantic interest in the victim and bides their time, waiting for an opportunity to scam the unrequitedly in love victim. On average, romance scam victims lost $15,559. This was triple the next highest scam, the impersonation scam, with victims losing an average of $5,746.

The report states that the figures for romance scams may be higher because underreporting is more prevalent among victims of this “typical individual” scam.

Additionally, romance scams were unaffected by the bear market. With impersonation, investment, NFT, and giveaway scams, average revenue dropped significantly last May when the collapse of Luna/UST sparked a bear market.

Romance scams, which involve gaining a victim’s trust before deceiving, don’t rely on digital asset new prices and promises of endless profits.

“Such an emotional pitch is probably equally effective regardless of trends in the broader market,” Chainalysis said, because the victim’s primary goal is not to get rich quick, but to help someone they consider a potential romantic partner. Are.”

Most digital asset scams affect victims globally. However, NFT scams almost exclusively targeted North America and Australia, while impersonation scams disproportionately affected the US and Russia.

The report reiterates previous studies showing that most digital asset scams are perpetrated by a few cybercriminal groups. Chainalysis found 88 scams that share an address in Los Angeles, indicating they are likely related. Many scams also share blockchain wallet addresses.

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