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Crypto Scam Revenue Drops 46%, Investment Scams Generate Most Revenue

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•Chainalysis reported that cryptocurrency scams generated $5.9 billion in revenue in 2022, representing a 46% decrease from 2021.
•Investment scams were the most profitable type of scam, making up more than half of the total revenue at $3.4 billion. Romance scams had the highest average victim deposits at almost $16,000.
•The data showed that scam revenue was closely linked to Bitcoin’s price movements and that stablecoins were more commonly used for scams. In addition, U.S.-based victims made up a disproportionate share of NFT-related scam funds and centralized exchanges sent significant payments to scammers.

Crypto Scams: Revenue Drops by 46%

A February 16 report by Chainalysis revealed that crypto scam revenue decreased by 46% in 2022 compared to 2021, reaching $5.9 billion in total. Investment scams proved to be the most lucrative category for fraudsters, generating over half of the total revenue with $3.4 billion collected from victims throughout the year.

Romance Scams Have Highest Average Victim Deposits

Although investment scams generally generated the most overall income, romance scams had the greatest impact on a per-victim basis due to their higher average deposits amounting to nearly triple those seen in other categories of frauds studied by Chainalysis. The firm also noted that many romance scam cases go unreported because of their personal nature which could lead to higher overall figures than what is currently reported about this specific form of scamming activity.

Scam Revenue Closely Follows Bitcoin Price Movement

Data gathered by Chainalysis indicated that as Bitcoin’s price rose or fell during the course of last year so did illicit activities related to cryptocurrency since there seemed to be a three-week lag between changes in BTC pricing and corresponding adjustments in fraudulent revenues received by scammers around the globe during this period.. Stablecoin usage was also found to have increased among fraudsters likely as an insurance measure against potential market crashes or sudden shifts in investor sentiment triggered by price volatility swings seen with digital assets like Bitcoin throughout last year’s trading sessions..

US Victims Disproportionately Targeted for NFT Frauds

In addition, US citizens made up a disproportionately large portion of victims targeted for NFT frauds while centralized exchanges continued sending significant amounts of money towards fraudulent activities according data compiled from Chainalysis’ research into crypto crime trends throughout 2020-2021 . Crypto ATMs were surprisingly not commonly used for illicit activities as only 1% out of all payments made towards crypto swindles originated from these machines according to findings released by Chainalysis earlier this month..

Conclusion

Overall crypto crime has dropped significantly across various categories like those outlined within Chainalysis’ February 16 report but potential risks still remain especially when it comes to investment and romance scams which have proven particularly difficult for law enforcement agencies around the world tackle despite concerted efforts aimed at minimizing losses attributable these types criminal activities involving digital assets such as cryptocurrencies and nonfungible tokens (NFTs).