- A report by Chainalysis revealed that revenue from crypto scams went down by 46% in 2022.
- Investment scams generated the most revenue last year, at $3.4 billion.
A 16 February report by Chainalysis found that revenue from cryptocurrency scams went down by 46% in 2022. According to the crypto analytics firm, the total revenue from crypto scams dropped from $10.9 billion in 2021 to $5.9 billion in 2022.
The report included data from five categories of scams, namely investment scams, romance scams, NFT scams, giveaway scams and impersonation scams.
Investment scams account for more than half of the revenue
The top scam of 2022 was Hyperverse, which generated almost $1.3 billion in revenue. Investment scams were the dominant category, with all ten of the top scams being investment scams. However, romance scams had the most destructive impact on a revenue-per-victim basis.
Despite generating lower overall revenue, romance scams had an average victim deposit of almost $16,000, which is nearly triple the next-closest category. It is likely that the total revenue and reach of romance scams are higher than reported due to under-reporting by victims because of the personal nature of these scams.
The data gathered by Chainalysis indicated that scam revenue closely follows the price of Bitcoin [BTC], maintaining a three-week lag between price moves and changes in revenue. Investment scams were the most correlated with Bitcoin’s price, likely because of the promise of outsized investment returns.
In contrast, romance scams and other types of scams whose performance are not tracked with Bitcoin’s price, such as giveaway scams, follow different revenue patterns throughout the year.
Scammers turn to stablecoins
The changing market conditions evidently led to fraudsters adopting stablecoins for their scams. The change in preference of crypto assets likely represented a hedge against a market crash and a preference by potential victims to hold their Bitcoin in anticipation of a price hike.
Chainalysis’ report also found that most scam revenue disproportionately comes from the U.S., particularly NFT-related scams. Moreover, centralized crypto exchanges and DeFi protocols also sent a significant amount to scams.
Interestingly, roughly 1% of victim payments to scams come from crypto ATMs, indicating that this payment method is not commonly used for illicit activities.