Crypto winter forced scammers to switch their tactics.
Scammers adapt better than we can imagine and change depending on the market situation. This revelation was made in a recently hosted webinar by prominent blockchain analytics firm Chainalysis wherein it gauged crime trends in the industry market during the crypto winter. The data gathered by the firm revealed how scammers adapted to the developments and volatility of the crypto market.
Not all scams behaved the same way in the context of the bear market. This time around, it was the free giveaway and romantic scams that managed to swipe money from victims’ pockets.
Scammers Post Terra Collapse
The data gathered by Chainalysis demonstrated ways in which scammers adapted to the developments and volatility of the crypto market. According to the firm’s cybercrimes research lead, Eric Jardine, the catastrophic collapse of Terra in May last year forced these fraudulent entities to switch their strategies.
The fall of the algorithmic stablecoin and the subsequent contagion spooked investors who, for the most part, remained reluctant to invest in projects.
As a result, investment scams were not seeing success as they used to be when the market was rallying. “Playing the same script over and over” did not make sense, and it was during this time that scammers resorted to luring victims by targeting their greed with free giveaway scams. Romantic scams were yet another ploy to steal money.
The exec stated,
“It’s suggestive here that there is an adaptation on the part of the scammers and market conditions make investment scams unlikely to be profitable; they may be substituting their tactics toward other scams that play on different emotional sense.”
Crypto Scam: 2021 to 2022
The overall revenue from digital asset scams was nearly halved from nearly $11 billion in 2021 to $5.9 billion in 2022. Revenues from ransomware attacks also declined by 40.3% to at least $456.8 million in 2022 from $765.6 million in 2021. This trend was indicative of an increasing unwillingness among the victims to pay ransomware attackers rather than a decline in the actual number of exploits.
However, there is another type of scam that has gained prominence – the multi-level marketing scams – which accounted for a majority of stolen funds last year. Moreover, nearly $1.3 billion of the crypto scam revenue was raked in through the hyperverse scam.