Chainalysis breaks down how scammers adapt during the bear market

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Scammers can also feel the winter chill in cryptocurrency with a 46% drop in fraud revenue, but some continue to adapt and thrive despite the bear market.

At a cryptocrime webinar focused on crimes that affect consumers, Eric Jardine, cybercrime research lead at blockchain analytics firm Chainalysis, said: broken We explain how scammers change their strategies as market conditions change.

Romance and giveaway scams increased in 2022. Source: Chainalysis

According to Jardine, 2022 saw a drop in overall revenue from cryptocurrency scams, but not all scams behaved the same way. He explained:

“One of the new innovations in this year’s report is the subclassification of scams into types. What we discovered was that not all scams behave the same in bear market conditions. ”

While Terra’s collapse in 2022 has made crypto investors skeptical about investing, scammers have exploited greed with free gift scams and played with people’s hearts with romantic scams. I turned to other strategies. Jardine explained:

“Here, there is an adaptation on the part of the scammers, suggesting that market conditions make investment scams less likely to be profitable. It may have been replaced by other scams that used

Data presented by Jardine shows that as soon as investment fraud becomes ineffective, romance and giveaway fraud rises. This suggests that scammers aren’t just “playing the same script over and over”, they can change depending on market conditions.

Related: FBI Warns Against Increasing Crypto Romance Scams During Valentine’s Week

Aside from romance and giveaway scams, the cybercrime expert also highlighted that multi-level marketing scams accounted for the majority of the $5.9 billion lost to fraud in 2022. At $1.3 billion, it represented about 22% of fraud revenue that year.