Although scammers may also feel the chill of crypto winter, as scam revenue has dropped 46%, some continue to adapt and thrive despite the bear market.
In a webinar on crypto crime focused on crimes affecting consumers, Eric Jardine, head of cybercrime research at blockchain analytics firm Chainalysis, broke down how scammers change their strategies as the market situation changes.
According to Jardine, While overall cryptocurrency scam revenue fell in 2022, not all scams behaved similarly. He explained that:
“One of the new innovations in this year’s report was to subclassify scams into types. And there, what we found was that not all scams behaved the same way in the context of the bear market.”
Although the collapse of Terra in 2022 made crypto investors skeptical about investing, scammers resorted to other strategies, including taking advantage of greed with free sweepstakes scams and playing with people’s hearts through romance scams. Jardine explained that:
“It is suggestive here that there is adaptation by scammers and market conditions make investment scams unlikely to be profitable; they may be substituting their tactics towards other scams playing on a different emotional sense.”
According to data presented by Jardine, as soon as investment scams are no longer effective, romance and sweepstakes scams are on the rise, suggesting that scammers are not just “playing the same script over and over again” and may change depending on the market situation.
Aside from romance and sweepstakes scams, the cybercrime pro also highlighted that a multi-level marketing scam took a large chunk of the $5.9 billion lost to scams in 2022. Jardine showed that among the top scams of the year, the hyperverse scam racked up about $1.3 billion, about 22% of revenue from scams that year.
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