Silver Linings: Crypto Scams Have Receded Alongside Bitcoin’s Price

Kim Grauer, Director of Research at Chainalysis, stated that there has been a pullback in funds received from cryptocurrency scam addresses during bear markets. Ransomware and other forms of financial crime within the digital asset market do not follow the same trend.

Market Scams

Grauer explained Thursday to Yahoo Finance that scamming is the most significant subset of criminal activity on blockchain. Chainalysis data shows scams as the largest source of criminal revenue in 2021, with $7.7 billion in 2021 alone.

Although they are still considered a “pack leader”, the director pointed out that their popularity tends to shrink along with the wider crypto market. Scams are less effective as Bitcoin’s price has been in a downward trend throughout the year.

Grauer believes that the correlation is natural. Grauer believes the correlation is natural.

She said, “You could compare that with something like ransomware where there’s no market basis for how many ransomware attacks are there to be.” It’s just something that happens constantly.

Every market cycle brings new opportunities for scammers. Law enforcement is learning how to prevent similar schemes.

Nevertheless, the methods of scammers are getting more sophisticated with every crypto winter. Between January 2021 and March 2022, victims of cryptocurrency romance scams or government/business imposters reaped over $300 million.

Investment scams remain the most lucrative and common in the industry. Grauer warned investors to be cautious about investing in schemes that promise unrealistic returns.

An anonymous party claiming to be associated with “Squid Game,” pumped the “Squid Game Token” in late October. After making astronomical gains, investors were finally rug-pulled, while the founders disappeared with barely a trace.

Ransomware Crimes are on the Rise

Ransomware is malicious software that blocks victim’s computer access and threatens to publish their personal information until they pay a certain amount of money. As it is anonymous and irreversible, cryptocurrency is a popular payment method in these schemes.

According to official Chainalysis numbers, ransomware made scammers more than $602 million in 2021. It is possible that the actual number will be higher.

John Oliver, a political comedian and host of Political Comedy, took aim at Monero’s privacy coin for supporting ransomware attacks by its marketing. He responded to an advertisement for Monero, “There’s quite a clear subtext to what’re selling there.”

Although crypto crime is a serious concern for regulators and pundits alike, there are some statistics that suggest it’s not worth the attention. The US Treasury Department acknowledges that fiat money is still much more effective than Bitcoin for money laundering. A Chainalysis report from February revealed that illicit crypto transactions are trending lower every year.

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Marla Brooks

Marla Brooks – Financial Analysis My name is Marla Brooks, and I am the mainstream behind the””  for the powerful and most delicate insights into the latest activities in the financial analysis category. I started my journey as an independent financial consultant. I had approximately nine years of experience in this field. I am free soul so; my passion for exploring the world has taken me to the nations across the globe and given me the chance to report for a portion of the best news associations. Currently, I am a full-time editor as experienced in finance and started to use my abilities.

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