Cryptocrime hit record highs in 2022 – people could lose billions in 2023
BRATISLAVA, Slovakia — Cryptocurrency may be the hot commodity for investors in recent years, but a new study shows that millions of dollars are disappearing every single day thanks to crypto-related crime. Researchers say crypto-crime hit an all-time high last year, with investors in digital currencies losing roughly $12 billion in 2022 alone. Unfortunately, the report warns that it will only get worse in 2023.
A team at Chainplay notes that crypto investors worldwide have been robbed of over $30 billion over the past decade. In 2022, there were 436 separate cryptocrime incidents, more than four times the number reported in 2021 (94). Meanwhile, the amounts stolen during these crimes continue to rise, increasing by 46 percent between 2021 and 2022.
When you break down the nearly $12 billion stolen in 2022, that’s $1.4 million in cryptocurrency disappearing every hour from people’s accounts.
Summer is the season for crypto crime
The study finds that June is a terrible time to invest in crypto. More digital crimes stealing crypto have taken place in June than any other month in the last 10 years (76) with the exception of May (77). Digital crooks got away with $5.7 billion during crimes in June, representing nearly a fifth of all cryptocurrencies lost since 2012.
Although the study finds that investors in Turkey have lost the most money to cryptocrime ($2 billion), researchers say that nearly $23 billion of the money stolen since 2012 comes from “undefined” sources.
How can this be? The answer is simple and also one of the reasons why people like digital money. Cryptocurrencies such as Bitcoin and Ethereum are digital, encrypted and decentralized mediums of exchange.
“Although Bitcoin is not anonymous, it is pseudonymous, meaning it can mask the identity of users. With the right tools and techniques, it is possible to trace back the owner of transaction addresses,” according to cryptocurrency exchange Crypto.com.
If you lose cryptocurrency, you probably won’t get it back
The Chainplay team notes that centralized exchanges are the most likely targets for crypto thieves. These exchanges have lost over $13 billion to cyber thieves over the past decade. The most common tactic is a “rug pull” attack, which is a scam where a fake developer attracts investors but pulls out before the project is complete. This leaves the crypto investors with a worthless asset, literally “pulling the rug out” from under them.
According to the study’s estimates, 2023 will be even worse for people trading cryptocurrencies worldwide. Investors could lose more than $16 billion this year, the study warns. That figure could reach $20 billion by 2025. What’s more, the team notes that authorities have only been able to recover a fifth of the krypton ever lost.
Study methodology and limitations:
Data was scraped from the Crystal Hack and Scam Report 2022, which includes: devices, types of scams, countries, amounts, currencies and dates. Missing data in 2022 was subsidized by cases collected from the REKT database. Data was analyzed and insights were extracted using the data visualization software PowerBI. Lack of historical data is possible due to the large number of frauds and scams in the past. Chainplay.gg researchers note that the data presented may be skewed due to the substitution of missing data.
