Crypto scams are down 77% – but this scam is making a huge comeback

According to a recent report by blockchain intelligence firm Chainalysis, cryptocurrency scams are set to drop by a whopping 77% in the first six months of 2023, from $3.3 billion to $1.1 billion.

The problem, however, is that ransom attacks are back in vogue, with criminals receiving 62.4% more revenue in the first six months of 2022 compared to the previous year.

On July 12th, Chainalysis released its Mid Year Crypto Crime Report, noting that it is the second year in a row that scam revenue has trended downward.

The firm observed that historically, scam revenues increase in bullish markets – but this has not happened so far in 2023:

“Typically, positive price movements translate into higher scam revenues, possibly because market surges and FOMO make victims more vulnerable to scammers’ pitches. But the massive fallout in the 2023 scam has reversed that long-standing trend.

Flows to known illegal entities fell 65% in the first six months of 2023 compared to the same time frame last year, while flows to risky entities – such as cryptocurrency mixers and high-risk exchanges – fell 42%.

While Chainalysis partially attributed the decline to a decrease in transaction volume, it noted that illegal flows declined at a faster rate:

“Transaction volumes declined across the board, but the decline was much less severe for legitimate services, which only saw a 28% drop in flows.”

Kim Grauer, director of research at Chainalysis, told Cointelegraph that even victims of past scams are becoming more “scrupulous” with their investment decisions and, as a result, are no longer falling for the bait thrown by scammers. This may also contribute to the decline in scam revenue.

“It is entirely possible that victims of scams have learned to be more honest,” the firm said. “It is also possible that government and industry awareness campaigns, as well as media reporting, have helped educate the public about the risks of scams.”

Chainalysis warned that artificial intelligence tools could increasingly be used to promote scams through the use of deepfakes, among other things.

“Given the growing prominence of romance and pig slaughter scams, one thing to look into is the use of AI to increase effectiveness and scale, as these scams are largely text-based.”

Hacks are also set to drop by $1.1 billion in the first six months of 2022, according to Chainalysis.

Ransom criminals ‘hunt big game’ companies with deep pockets

However, not everything has gotten better across the board. Ransomware revenue grew 62.4% to $449.1 million in the first half of 2023 through June.

According to Chainalysis, this is because attackers are now “hunting big game” large-scale organizations with deep pockets to extract “as much money as possible” from companies willing to pay.

“Why the twist of fate? For one thing, big game hunting — that is, the targeting of large, deep-pocketed organizations by ransomware attackers — appears to have returned after the peace in 2022.

These raiders are on track to have their second biggest year ever, 4.6% behind the 2021 full-year figure of $940 million.

Chainalysis quoted Andrew J. Davis, risk officer at cybercrime consulting firm Kivu, as saying that the decrease in 2022 can be attributed to stronger cyber security practices and new laws that impose stricter restrictions against ransom paying.

As a result, ransom attackers are now trying to “squeeze as much money as possible” out of companies willing to pay the ransom, Davis said.

Chainalysis has significantly increased the payout sizes extorted by the largest criminals.

Connected: Pink, Pussy, Venom, Inferno – Drainers Coming to a Crypto Wallet Near You

United Nations Office on Drugs and Crime Unit found In October 2021 it was said that a worldwide ransom occurs every 11 seconds, resulting in a total of $20 billion in damages in 2021 alone.

Cyber ​​Suraksha Ventures Predicted It was said in June that ransomware would cause annual losses of $265 billion to its victims by 2031.

Chainalysis notes that all figures are “lower bound estimates” and that the volume of illegal and risky transactions is likely to increase over time if new illegal activity is found.

Furthermore, the data does not include crimes where cryptocurrencies are used as a method of payment.

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