Chainalysis has published a new report covering the crypto market in which it says that a relatively lesser number of people have been targeted by crypto scams this year up till now. This has been a result of a dramatic decline in the prices of crypto assets as well as the exit of naïve crypto consumers from the market, as disclosed by the report.
Crypto Scams Decline by 65%, Says Chainalysis’ New Report
In its report published on 16th August, Chainalysis noted that the cumulative revenue of crypto scams in 2022 till today is presently standing at the figure of $1.6B. While this is compared to a decrease of up to 65% from that of the previous year, which seems to have some association with the crypto prices that have lowered to the ground abruptly. Since January this year, the crypto scams’ revenue has decreased in line with the pricing of Bitcoin.
Not only has the scam revenue fallen to that extent, the overall number of personal transactions to scams, that have been done throughout this year, is at its lowest level as compared with that of the previous 4 years. Eric Jardine, Cybercrimes Research Lead at Chainalysis as well as the author of this report, elaborated that it is during the bull markets when the investors are more prone to be entangled in scams.
He went on to say that this is the time when investors are being offered what appear to be enormous investment opportunities as well as outsized returns, and that eventually, the entities that are perpetrating the scam will trick them. Jardine also postulated that bull markets attract inexperienced and new investors, and that there is a greater likelihood of unsophisticated investors falling victim to fraudulent schemes than there is for experienced and skilled investors.
The researcher also mentioned that prominent scams such as Finiko and PlusToen have played a significant role in the current results. He asserted that the cumulative scam revenue of these projects (which occurred in 2021) was almost $3.5B. Simultaneous to this, Jardine pointed out that the biggest cryptocurrency scam of this year thus far has just collected $273M. The respective scam was done by JuicyFields.io (a venue specified for cannabis investment).
Hacks Are Beneficial, Says Chainalysis’ Leading Cybercrime Researcher
As per the researcher, the investors have been locked out of the accounts – focused on e-growing services related to cannabis – by the respective platform. In his words, although the crypto scams have decreased, an enormous increase of 58.3% has been witnessed in crypto-focused hacks in recent July. These hacks have drained an amount of $1.9B while excluding $190M of the hack of Nomad bridge that took place on 1st August.
Jardine revealed that the respective upsurge is to a great extent linked to the fame gained by the DeFi applications during 2021. He also stated that with these hacks, the vulnerabilities within the new programming languages of smart contracts can be detected and rectified which is beneficial in terms of security.
