How the crypto winter made scammers improvise, adapt, overcome: Report

  • Chainalysis recently revealed that crypto scammers adapted to the crypto winter by switching tactics.
  • Scammers moved away from investment scams and employed romance and giveaway scams after Terra’s collapse.

Blockchain analytics firm Chainalysis recently hosted a webinar that inspected crime trends in the crypto market during the crypto winter. The data gathered by Chainalysis revealed how scammers adapted to the developments and volatility of the crypto market. 

Crypto scammers changed tactics after Terra’s collapse

According to Eric Jardine, the cybercrimes research lead at Chainalysis, the collapse of Terra in May last year forced cryptocurrency scammers to switch their tactics. Prior to the crash, investment scams as a category dominated the overall revenue from cryptocurrency scams. However, in the aftermath of Terra’s collapse, they switched to romance and giveaway scams.  

Scammers tackled the hesitancy to invest among investors by targeting their greed with free giveaway scams.

Jardine added:

It’s suggestive here that there is an adaptation on the part of the scammers and market conditions make investment scams unlikely to be profitable; they may be substituting their tactics toward other scams that play on different emotional sense.”

As per the report, romance scams attracted the highest average victim deposit size, at over $15,500 USD. Investment scams followed at a far second, duping victims of $995 USD on an average. However, despite the change in tactics, the crypto winter made a significant dent in the earnings of scammers, bringing down cryptocurrency scam revenue by 46% in 2022. 

Aside from the investment, romance and giveaway scams, multi-level marketing scams also accounted for a significant portion of the whopping $5.9 billion that was lost to crypto scams last year. Data gathered by Chainalysis revealed that approximately $1.3 billion of the crypto scam revenue was generated through the hyperverse scam.

However, the overall revenue from cryptocurrency scammers dropped from $10.9 billion in 2021 to $5.9 billion in 2022.

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