- Crypto price drop led to drop in crypto scams
- Over $7 billion lost to crypto scams in 2021.
- Scammers continue to try evolving techniques in crypto space.
Kim Grauer, Director of Research at crypto analytics firm, Chainalysis, has recently explained that the price crash in the crypto market has led to a drop in the number of crypto scams, with fewer funds stolen since the market plummetted.
In a recent interview with Yahoo Finance, the director said there had been a “pullback” in funds received by cryptocurrency scam addresses during the bear market. According to data from Chainalysis, crypto scams has fetched far less for criminals this year, especially after the price drop compared to 2021.
“Of all the types of illicit activity… scamming tends to move the most with the market,” @chainalysis Director of Research Kim Grauer says on crypto scams, adding: “You can compare that to something like ransomware where there’s not really a market basis.” pic.twitter.com/zuGAZUnNz3
— Yahoo Finance (@YahooFinance) July 7, 2022
Scammers netted a whopping $7.7 billion from crypto hacks last year when Bitcoin, Ethereum, and Binance Coin, among many others, hit their all-time high prices. However, the crypto market faces a setback from those times, prompting a drop in attempts to hack it.
Grauer, during her interview, explained that although crypto scam is still in trend in the industry, this year, he noted that hacks tend to expand and shrink alongside the broader crypto market.
“Of all the types of illicit activity… scamming tends to move the most with the market,” she said.
The entire crypto market is currently valued below $1 trillion, a precipitous decline from its peak of $3tn in November last year. A number of factors drove the declines – a mix of crypto-specific events and wider macroeconomic issues – and some of them will also continue to hang over the market this week.
Crypto scams, a race of evolving techniques
From time to time, regardless of whether the crypto market booms or is in recess, crypto hackers and scammers continue to try evolving techniques to pose new threats to the industry.
Over the past five years, cryptocurrency romance scams and business/ government imposters netted over $1.3 billion from victims.
Investment scams are still the most common and profitable in the industry. One of such was last October when an anonymous party pretending to be affiliated with the hit Netflix series “Squid Game” pumped the “Squid Game Token.” After growing the token’s value by 110,000% in five days, investors were eventually rug-pulled while the founders vanished with barely a word.