Crypto scams receded with the Bitcoin price crashing and were looking less attractive during the bear market which is one of the reasons for the drop in scams so let’s read more today in our latest Bitcoin news today.
The Director of Research at Chainalysis Kim Grauer said there was a pullback in funds that were received by crypto scam addresses in the bear market and other forms of financial crime in the crypto space like ransomware which doesn’t’ reflect the same trend. As Grauer explained to Yahoo Finance, scammed the largest subset of criminal activity on the blockchain, and the data of Chainalysis shows that scams were the biggest source of revenue for criminals in 2021 which netted $7.7 billion in 2021 alone.
Though being the pack leader in 2022. the director noted that the prevalence tends to expand and then shrink on the broader market and with the BTC price dropping in a consistent downtrend across the year and the scams were not really successful in turn. Graur thinks the correlation is natural:
“[A scam] is someone willingly parting with their funds in hopes of seeking a higher return. You can compare that to something like ransomware, where there’s not really a market basis for the number of ransomware attacks there are. It’s really just continually happening all the time.”
The scamming ecosystem is evolving with the market cycles and law enforcement is learning to crack down on the related schemes. With that said, scammers’ methods are becoming even more sophisticated with each crypto winter and crypto romance scams and business imposters netted over $300 million from the victim from 2021 to March 2022. The investment scams are the most profitable in the industry and Grauer advised investors to watch out for projects with founders promising unrealistic returns when vetting for schemes.
For example, an anonymous party pretending to be related to the Netflix series Squid Game pumped the Squid Game Token and charted major gains after the launch with investors being rug pulled right after while the founders vanished. Crypto scams receded but ransomware is still a very popular method. Ransomware is malicious software used to block the victims’ computer access or to try to publish their personal data until they send a sum of money. Crypto is exceedingly popular as a payment method and allows extortionists to become anonymous and keep the transactions irreversible.
Ransom attacks netted over $602 million for the scammers in 2021 and according to the numbers, the figures are higher. While crypto crime weights on the minds of regulators some stats suggest that it is now worthy of the coverage that it receives. With the US Treasury Department admitting, that fiat money is far greater than the one of Bitcoin for money laundering but the Chainalysis reports show that the share of illicit transactions is trending lower each year.
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