According to a new report from blockchain intelligence firm Chainalysis, the amount of illicit activity involving cryptocurrencies has decreased by 15% so far this year. This compares to a 36% drop in legitimate transactions.
“If we dig into specific forms of cryptocurrency-based crime, we find that some actually increased in 2022, while others declined more than the overall market,” the firm reports.
According to Chainalysis, the total scam revenue for 2022 is 65% lower than at the end of July 2021 and is currently at $1.6 billion, which is attributed to the decline in the overall crypto market.
“Since January 2022, scam revenue has fallen more or less in line with bitcoin pricing,” the firm says. “The cumulative number of personal transfers in scams so far in 2022 is the lowest in the past four years.”
Chainalysis says that this change shows that fewer people are falling for cryptocurrency scams, as these scams are now less attractive as prices are falling in bear markets.
The report noted that another factor in the decline is that there has yet to be a single significant scam in 2022 compared to previous years, when the scammers behind PlusToken made over $2 billion in 2019, or when Finico stole $1.5 billion in 2021.
While the number of scams may be small, Chainalysis reports that as of July 2022, $1.9 billion in crypto was still stolen in hacks. These include the $190 million hack of Nomad Token Bridge or the theft of $5 million from the Solana wallet earlier this month, down from $1.2 billion in the same period last year.
“We should not expect a reduction in theft based on cryptocurrency market movements the way scamming does,” the firm says. “As long as crypto assets held in DeFi protocol pools and other services have value and are vulnerable, bad actors will try to steal them.”
Founded in 2014, Chainalysis provides software tools for government agencies, financial institutions and businesses to detect and prevent crypto-related crime.
Stay on top of crypto news, get daily updates delivered to your inbox.