The revenue criminals acquired from crypto scams dropped from $10.9 billion to $5.9 billion in 2022, a new report by Chainalysis shows.
According to the report, investors in Africa were more frequently targeted by investment and giveaway scams, indicating a high level of willingness to invest in the cryptocurrency craze despite the associated risks.
The following African countries were among the top where scammers generated the most revenue per user through investment and giveaway scams in 2022:
- South Africa
Giveaway scams were particularly prevalent in Kenya and Nigeria, while South Africans were mainly targeted by investment scams.
Although the revenue from scams decreased overall, there were still several scams that were highly successful. For instance, the most profitable scam, the Hyperverse, generated revenue of almost $1.3 billion.
The research firm attributes the fall largely to market conditions with some type of scams found to be rising despite the continued bear market.
“Scam revenue throughout the year tracks almost perfectly with Bitcoin’s price, consistently maintaining a three-week lag between price moves and changes in revenue,” Chainalysis says.
Unlike other kinds of scams, romance and giveaway scams don’t show a positive correlation with Bitcoin’s price.
Types of Scams
In 2022, all of the top ten scams were related to investment, making it the dominant category in terms of overall revenue generated last year, but Chainalysis insists the rest of the scams are not to be ignored.
Below is a description of the different scams identified in 2022:
- Giveaway scams are scams in which fraudsters solicit victims to send them cryptocurrency, promising to send them more in return. Giveaway scammers often impersonate celebrities to lend credence to the promise
- Impersonation scams are scams in which fraudsters pretend to be someone in a position of authority or expertise – for instance, an IRS or Social Security representative – and tell victims they must send in cryptocurrency to correct some kind of problem or avoid getting in trouble
- Investment scams are scams in which fraudsters promote fake investment opportunities promising outsized returns
- NFT scams are scams in which fraudsters trick victims into buying fake NFTs designed to resemble more notable collections
- Romance scams are scams in which the fraudster pretends to build a romantic relationship with the victim in order to convince or guilt them into sending them money. Romance scams can also include ‘pig butchering scams’ which blend elements of romance scams and investment scams
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