Report: Crypto Scam Revenue Drops 46% in 2022, It Leads the List
A report by Chainalysis revealed that crypto scams are set to reduce revenue by 46% in 2022. Investment scams generated the most revenue last year at $3.4 billion.
A February 16 report by Chainalysis found that revenue from cryptocurrency scams is set to drop by 46% in 2022. According to crypto analytics firm, total revenue from crypto scams is set to drop from $10.9 billion in 2021 to $5.9 billion in 2022.
The report included data on five categories of scams, namely investment scams, romance scams, NFT scams, giveaway scams and impersonation scams.
Investment scams account for more than half of revenue
The top scam of 2022 was Hyperverse, which generated approximately $1.3 billion in revenue. Investment scams were the dominant category, with all of the top ten scams being investment scams. However, romance scams had the most devastating effect on a revenue-per-victim basis.
Despite generating less overall revenue, the average amount made to victims in romance scams was nearly $16,000, nearly triple the next-closest category. It is likely that the total revenue and reach of romance scams is higher than reported due to under-reporting by victims due to the personal nature of these scams.
Data collected by Chainalysis indicates that scam revenue closely follows the price of bitcoin. [BTC]Maintaining a three-week lag between price movements and revenue changes. Investment scams were most highly correlated with the price of bitcoin, possibly due to promises of large investment returns.
In contrast, romance scams and other types of scams whose performance is not tracked with the price of bitcoin, such as giveaway scams, follow different revenue patterns throughout the year.
Scammers turn to stable coins
Changing market conditions have apparently prompted fraudsters to turn to stablecoins for their scams. The change in preference for crypto assets represents a hedge against a market crash and a preference by potential victims to hold their bitcoins in anticipation of a price increase.
The Chainalysis report also found that most of the scam revenue comes from the US, especially scams related to NFTs. Furthermore, centralized crypto exchanges and DeFi protocols also sent a significant amount to scams.
Interestingly, around 1% of victims of scams paid from crypto ATMs, indicating that this payment method is not commonly used for illegal activities.