Fewer people are getting scammed by crypto scams this year as hacks become the biggest threat to investors

It’s a bad year to be a crypto scammer.

As the prices of the most popular cryptocurrencies have fallen during a widespread “crypto winter,” fraudsters managed to steal just $1.6 billion this year, just 65% of what they stole from January to the end of July last year, according to a Tuesday report by blockchain data company Chainalysis.

The total number of individual transfers to crypto scams is also the lowest it has been in four years, Chainalysis wrote in the report, suggesting that fewer investors are being scammed than ever before.

One of the main reasons, the company suggests, is the dramatic decline in the prices of some of the most popular cryptocurrencies. The two most popular cryptocurrencies, Bitcoin and Ethereum, are each down more than 60% from their peaks last November, and others even more.

Falling prices mean there are probably fewer first-time investors entering the market right now, writes Chainalysis – and by extension, fewer gullible newbies for scammers to lure with their typical promise of quick and exorbitant returns.

There have also been fewer major frauds, which tend to push the total amount stolen in a year higher than it otherwise would have been. In 2019, PlusToken, a pyramid scheme posing as a South Korean wallet and crypto exchange, raised more than $2 billion from millions of people. And last year, the fraudsters behind Finiko, a Ponzi scheme aimed primarily at Russian speakers, stole more than $1.5 billion from investors.

The biggest scam so far this year was a cannabis investment platform called JuicyFields.io, which stole $273 million from unsuspecting investors, according to Chainalysis. This was just 24% of what last year’s biggest scam, Finiko, achieved from January to July 2021, the report said.

Although fraud has not fooled as many investors this year, hacks have emerged as the biggest threat to investors so far in 2022. From January to the end of July, hackers stole $1.9 billion from crypto-related services, up from $1.2 billion dollars in the same period last year. The report, which only covers the end of July, did not include two of the biggest hacks that occurred this month, namely the $190 million hack of cross-chain bridge Nomad and a $5 million hack that affected Phantom, Slope, and Trust Wallets.

Scams have not been as effective so far in 2022, but this could change in the latter half of the year, Chainalysis said.

“With huge increases in stolen funds, we cannot afford to rest on our laurels,” the report said. “The public and private sectors must continue to work together and hone their ability to combat cryptocurrency-based crime.”