Kevin Helms
A student of Austrian economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects and the intersection of finance and cryptography.
Illegal Crypto Activity Drops – Scam Revenues 65% Lower Than Last Year – Featured Bitcoin News
Chainalysis has found that illicit crypto volumes are down this year, with total fraud revenue at $1.6 billion, down 65% from the end of July last year. “These numbers suggest that fewer people than ever are falling for cryptocurrency scams,” the blockchain data analytics firm wrote.
Data shows that illegal crypto volumes are down
Blockchain data analytics firm Chainalysis published its semi-annual cryptocrime update titled “Illicit Activity Drops with the Rest of the Market, with Some Notable Exceptions” on Tuesday.
The company wrote that overall:
Illegal volumes are down just 15% year-on-year, compared to 36% for legal volumes.
Specifically, “Total fraud revenue for 2022 currently stands at $1.6 billion, down 65% from where it was through the end of July in 2021, and this decline appears to be tied to declining prices across currencies,” noted Chainalysis.
Furthermore, “the cumulative number of individual transfers to fraud so far in 2022 is the lowest it has been in the last four years,” the firm added.
Detailed chain analysis:
These numbers suggest that fewer people than ever are falling for cryptocurrency scams. One reason for this could be that with falling asset prices, cryptocurrency scams are… less tempting for potential victims.
The firm noted that no fraud identified in 2022 approached the level of Plustoken or Finiko. The former yielded over $2 billion from victims in 2019, while the latter yielded over $1.5 billion in 2021.
In addition, revenue from the darknet market has significantly decreased this year, and is currently 43% lower than where it was through July 2021.
One area where illegal activity will increase in 2022 is hacking and stolen funds. The blockchain analytics firm described:
Through July 2022, $1.9 billion worth of cryptocurrency has been stolen in hacking services, compared to just under $1.2 billion at the same time in 2021.
“This trend doesn’t seem to be reversing anytime soon, with a $190 million hack of cross-chain bridge Nomad and a $5 million hack of several Solana wallets already happening in the first week of August,” Chainalysis added. “Much of this can be attributed to the astonishing increase in funds stolen from defi [decentralized finance] protocols, a trend that began in 2021.”
What do you think of the findings from Chainalysis? Let us know in the comments section below.
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