Illicit activity involving cryptocurrency is down 15% in volume so far this year, according to a new report from blockchain intelligence firm Chainalysis. This compares to a 36% drop in legitimate transactions.
“If we dig into specific forms of cryptocurrency-based crime, we find that some actually increased in 2022, while others decreased more than the overall market,” the company reports.
According to Chainalysis, total scam revenue for 2022 is 65% lower than it was through the end of July 2021 and currently stands at $1.6 billion, which they attribute to the overall market decline of cryptography.
“Since January 2022, scam revenue has fallen more or less in line with Bitcoin prices,” the company states. “The cumulative number of individual transfers to scams so far in 2022 is the lowest it has been in the past four years.”
This change suggests that fewer people are falling for cryptocurrency scams, according to Chainalysis, as these scams are less attractive now that values are falling in the bear market.
Another factor in the decline, the report notes, is that there has not yet been a single major scam in 2022 compared to previous years, when the scammers behind PlusToken earned over $2 billion in 2019 or when Finiko stole $1.5 billion in 2021.
Although the number of scams is decreasing, Chainalysis reports that in July 2022, $1.9 billion worth of crypto was still stolen in hacks. These include the $190 million hack of the Nomad Token Bridge or the $5 million stolen from Solana wallets earlier this month, compared to just under $1.2 billion in the same period l ‘last year.
“We shouldn’t expect the theft to decline based on movements in the cryptocurrency market like the scam does,” the company says. “As long as crypto assets held in DeFi protocol pools and other services are valuable and vulnerable, bad actors will try to steal them.”
Founded in 2014, Chainalysis provides software tools to government agencies, financial institutions, and businesses to detect and prevent crypto-related crime.
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