New data reveals that crypto scams have significantly decreased in 2022, aligning with the decline in the prices of bitcoin and other cryptocurrencies. Chainalysis, a blockchain data platform, reported a 65% drop in total scam revenue during the first seven months of 2022 compared to the same period in the previous year. The broader cryptocurrency market also experienced a similar decline, correlating with the extended price decreases of bitcoin and other digital assets.
Chainalysis attributes the reduction in successful scams to the departure of “inexperienced” investors from the market. The analysis indicates that “fewer people than ever are falling for cryptocurrency scams” as these scams become less appealing to potential victims amid price drops.
Eric Jardine, the cyber crimes research lead at Chainalysis, suggests that the decline in scam activity may be linked to the decrease in new, inexperienced users entering the market. During periods of declining prices, individuals are less likely to be drawn in by hype and the promise of quick returns.
While the decrease in illicit cryptocurrency activity is viewed as a positive aspect of the crypto bear market, Chainalysis notes that the revenue generated by crypto scammers remains substantial, with $1.6 billion tracked to scammer accounts. The largest scam in 2022, known as Finiko, amassed $273 million worth of cryptocurrency, and two other scams raised over $100 million each.
Chainalysis also identified a decline in dark web revenue in the first half of 2022, which was 43% lower than the same period in 2021. This decrease is largely attributed to the shutdown of the Hydra marketplace, the largest illicit online market for drugs, hacking tools, and stolen data.