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Crypto Crimes Decline as Hacks and Scams Dry: Report

Updated: Jul 20, 2023

Revenue from illicit activities in the crypto space drops significantly in 2023, according to a mid-year report from Chainalysis.

Crypto crime drops in 2023
Source: Unsplash

In a recent mid-year report, blockchain analytics firm Chainalysis revealed a notable decrease in revenue generated by crypto crimes. The report highlights a significant drop in hacks and scams, leading to a crypto crimes decline. According to Chainalysis, the total losses incurred by the industry due to illicit actors have fallen by 65% in comparison to mid-2022, amounting to approximately $2.5 billion.


Bear Market Hits Scammers


While legitimate actors have experienced a "much less severe" decrease in inflows during the current bear market, scammers have been hit the hardest. Two major scam operations, VidiLook and Chia Tai Tianqing Pharmaceutical Financial Management, have vanished after deceiving investors with promises of substantial returns. Despite bitcoin's impressive 83% rally this year, which typically attracts opportunistic schemers, these scam operations have not been replaced.


However, the report reveals that impersonation scams are bucking the overall trend. Such scams involve fraudsters posing as authority figures and have managed to dupe nearly 50% more individuals this year compared to the previous year. Consequently, scammers engaging in impersonation scams have only witnessed a 23% drop-off in overall inflows, while other types of scams have experienced a staggering decline of 70%.


Crypto Crimes Decline


Chainalysis' findings indicate that the revenue from the crypto crimes can be attributed to several factors. Increased awareness among investors, stricter regulatory measures, and advancements in blockchain analytics tools have collectively contributed to curbing illicit activities within the cryptocurrency ecosystem.


The significant drop in hacks and scams is a positive development for the industry as it strengthens trust and confidence among both existing and potential investors. By mitigating the risks associated with crypto crimes, legitimate actors can operate in a more secure environment, fostering long-term growth and stability.


Protection From Scams


Despite the decline in crypto crime revenue, it is crucial for individuals and organizations involved in the cryptocurrency space to remain vigilant. As impersonation scams continue to rise, investors must exercise caution when interacting with authority figures or individuals claiming to represent trusted organizations. Conducting thorough research, utilizing secure platforms, and verifying the authenticity of individuals and projects can significantly reduce the likelihood of falling victim to scams.

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