Cryptocurrency Scammers Duped Victims out of $4.3 Billion Last Year: Chainalysis

Francisco Memoria

Data from blockchain analytics firm Chainalysis shows that cryptocurrency scammers have managed to dupe their victims out of $4.3 billion last year, tripling the amount seen in 2018.

According to Chainalysis’ report, the majority of the funds were linked to alleged Ponzi schemes, including OneCoin and PlusToken, which some deemed responsible for cryptocurrency price drops after it moved its massive stash.

The report reads:

The vast majority of that $4.3 billion went to just two large-scale Ponzi schemes, without which crime overall would account for just 0.46% of all cryptocurrency activity.

Per the security firm, scammers have been taking advantage of the unique positions cryptocurrencies currently have, as most people have heard about them and many “believe it has “get rich quick” potential.” Notably, the amount of cryptocurrency involved in scams in 2018 had dropped.

Ponzi schemes didn’t account for the full $4.3 billion, although they represented a majority of the funds cryptocurrency scammers obtained last year. Apart from them, they also used blackmailing, fake cryptocurrency mixers, phishing, and fake token sales.

The report adds 2.4 million individual transactions were made to six individual Ponzi schemes last year, with the average transfer being of $1,676 to these scams. To fake token sales, the average transaction was worth $4,188 in crypto. Chainalysis adds:

Scammers promise massive, outsized returns for those who invest in their fake companies, convincing victims to invest substantial sums in the hopes of a big payout.

As CryptoGlobe reported, scammers have even started hijacking the accounts of popular YouTubers to use their reach on the video-sharing platform to run fake cryptocurrency giveaways. In one reported instance, a hacker’s wallet had over $15,000 worth of XRP in it.

According to Chainalysis, the scammers mostly depended on cryptocurrency exchanges to cash out their ill-gotten crypto, as 57.6% of the funds associated with scams ended up being liquidated on exchanges.

While scammers made $4.3 billion duping cryptocurrency investors, darknet markets sold over $790 million worth of cryptocurrency last year. Their users also relied on cryptocurrency exchanges to either cash out or get crypto to buy illicit goods and services.

Featured image via Pixabay.