$7.8B Wiped Out in Crypto Ponzi Schemes in 2022
According to a report by TRM Labs, a blockchain analytics company, crypto criminals are now focusing on cryptocurrencies other than Bitcoin.
According to the Elicit Crypto Ecosystem Report, scammers and hackers have been making significant profits despite the decline in crypto prices. In 2022 alone, victims lost approximately $7.8 billion to crypto Ponzi schemes. Overall, fraudulent activities, including Ponzi schemes, received more than $9 billion in crypto, with a preference for USDT based on the Tron blockchain.
DeFi hacks made attackers $3.7 billion profit, with $2 billion stolen from cross-chain bridges. Additionally, about $1.5 billion was earned by darknet marketplaces selling illegal drugs, as reported by TRM.
Crypto criminals are using a tactic called chain hopping to make it difficult to trace their funds. They move money from one blockchain to another to cover their tracks. As a result, Bitcoin’s involvement in these crimes decreased from 97% in 2016 to 19% in 2022, according to TRM.
“In 2016, two-thirds of crypto hack volume was on Bitcoin; in 2022, it accounted for just under 3%, with Ethereum (68%) and Binance Smart Chain (19%) dominating the field,” the report. TRM also found that bitcoin is no longer the preferred coin for terrorism financing: now USDT on the Tron blockchain is dominating that market. The cryptocurrency is especially popular with ISIS and its affiliates in Pakistan and Tajikistan, TRM said.
Both Bitcoin and Tether (USDT) are widely used and easily exchangeable digital currencies. They are popular for various transactions and not just limited to illegal activities.
Bitcoin remains the preferred currency in certain criminal circles, particularly in Russian darknet marketplaces, where it accounts for 80% of the market. These platforms primarily deal in illicit goods, such as drugs, and accept bitcoin as the sole form of payment. While some larger Western marketplaces also accept monero, their presence in the overall darknet economy is relatively smaller, according to TRM.
In 2022, websites that shared inappropriate photos and videos of children received at least $3.32 million. Sadly, most of that money, over two-thirds, went to scammers who tricked people into buying access to content that didn’t actually exist.
