At least $7.7bn (£5.8m) worth of crypto assets was stolen from victims worldwide this year, a 81 per cent rise from 2020.
According to new research from Chainalysis, scams were once again the largest form of cryptocurrency-based crime by transaction volume. The rise in crypto scams this year came after scamming activity dropped significantly between 2019 and 2020, in large part due to the absence of any large-scale Ponzi schemes.
That changed in 2021 with Finiko, a Ponzi scheme primarily targeting Russian speakers throughout Eastern Europe, that scammed $1.1bn from victims.
The emergence of rug pulls was another change that contributed to 2021’s increase in scam revenue.
This is a relatively new scam type which is particularly common in the decentralised finance ecosystem, in which the developers of a cryptocurrency project – typically a new token – abandon it unexpectedly, stealing users’ funds with them.
Meanwhile, the number of deposits to scam addresses dropped from just under 10.7 million to 4.1 million. Chainalysis said it can assume there were fewer individual scam victims.
“As the largest form of cryptocurrency-based crime and one uniquely targeted toward new users, scamming poses one of the biggest threats to cryptocurrency’s continued adoption,” Chainalysis said in a blog on its website.
“Scammers’ money laundering strategies, however, haven’t changed all that much. As was the case in previous years, most cryptocurrency sent from scam addresses ended up at mainstream exchanges.
“Exchanges using Chainalysis KYT for transaction monitoring can see this activity in real time, and take action to prevent scammers from cashing out.”