Revenues to fall by 46% in 2022 — chain analysis

Revenues from crypto-fraud were reduced by almost half in 2022, mainly due to falling prices of crypto-assets, but two types of fraud managed to remain immune.

Revenue from crypto fraud in 2022, which includes investment scams, NFT scams and romance scams, among others, amounted to $5.9 billion in the year – a 46% decrease from 2021.

The data came from a February 16 crime report by Chainalysis, which attributed most of the decline in fraud revenue to poor market conditions – as lower crypto prices generally result in lower fraud performance.

However, Chainalysis pointed to two different scam types that managed to remain relatively immune to the price drop – romance scams and giveaway scams.

“Fraud revenue throughout the year tracks almost perfectly with Bitcoin’s price, consistently maintaining a three-week lag between price movements and changes in revenue. However, not all different types of fraud follow this pattern – some types of fraud see revenue changes increase as crypto asset prices decline,” the firm explained, adding to:

“For example, unlike other types of scams, romance and giveaway scams do not show a positive correlation with Bitcoin’s price.”

Romance scams, while having lower overall revenue as a category, achieved the highest average victim deposit size of the year – with the average victim losing just under $16,000, almost 3x more than the next largest scam type.

Romance scams usually involve building a relationship with the victim, where the scammer convinces them that they need their help.

Chainalysis said these types of scams are most likely to persist when crypto prices are down because it plays on a victim’s compassion rather than greed.

“That kind of emotional pitch is likely to be equally effective regardless of trends in the broader market, because the victim’s primary goal is not to get rich quick, but rather to help someone they believe is a potential romantic partner,” the firm wrote.

Related: Scammers are targeting crypto users with a new “zero value TransferFrom” trick

Romance scams, and pig slaughter scams in particular, have been seen as a growing area of ​​concern in crypto.

For example, a survey in the United Kingdom published on January 29 found that half of all crypto companies involved in fraud in the state were linked to pig fraud.