Chainalysis Report Shows Crypto Scams Plummeted In 2024

On-chain analytics data provider Chainalysis reported some interesting developments in the cryptocurrency market with its mid-year crypto crime update, termed “Illicit Activity Falls With Rest of Market, With Some Notable Exceptions,” published on August 16.

Chainalysis wrote in the report:

“Illicit volumes are down just 15% year over year, compared to 36% for legitimate volumes.”

The on-chain data provider explained: “Total scam revenue for 2022 currently sits at $1.6 billion, 65% lower than where it was through the end of July in 2021, and this decline appears linked to declining prices across different currencies.” The company further narrated that “the cumulative number of individual transfers to scams so far in 2022 is the lowest it’s been in the past four years.”

Chainalysis detailed in its report:

“Those numbers suggest that fewer people than ever are falling for cryptocurrency scams. One reason for this could be that with asset prices falling, cryptocurrency scams … are less enticing to potential victims.”

Chainalysis Says Hacks On The Crypto Space Increased In 2022

Chainalysis noted that no scam carried out in 2022 neared that of Plustoken or Finiko. The Plustoken scam saw over $2 billion evaporate from victims in 2019, while the Finiko scam netted over $1.5 billion in 2021.

Additionally, recorded revenue from the darknet market has also slumped this year, with reports showing it currently sits 43% lower than where it was in July 2021.

However, hacks and stolen funds appear to have taken a notable increase in 2022. The on-chain data provider detailed:

“Through July 2022, $1.9 billion worth of cryptocurrency has been stolen in hacks of services, compared to just under $1.2 billion at the same point in 2021.”

The firm added: “This trend doesn’t appear set to reverse any time soon, with a $190 million hack of cross-chain bridge Nomad and $5 million hack of several Solana wallets already occurring in the first week of August.” Chainalysis also explained: “Much of this can be attributed to the stunning rise in funds stolen from DeFI [decentralized finance] protocols, a trend that began in 2021.”