Cryptocurrency linked scams top charts in 2024: Chainalysis

Dubai: Scams involving cryptocurrencies now represent one of the biggest areas in crypto-related illicit activity over the year to date, with 43 per cent of such inflows going to digital wallets that only turned active this year.

This clearly points to a ‘surge in new scams’, and a significant development ‘given that the next highest year – 2022 - saw just 29.9 per cent of total year to date flows go to wallets that became active that year’, says a new report from Chainalysis.

Research estimates that based on average payment size, ‘romance scams’ had the worst impact on victims among scam types. Also, data suggests that this type of scam activity has grown by 85x since 2020.

“From 2022 to 2024, just one such organisation, a popular fraud shop, received $10.5 million from scammers known to perpetrate romance scams,” said Chainalysis. “With this shop selling ‘seasoned’ social media profiles for anything between $5 to $20 per account, scammers could have purchased between 525K and 2.1 million social media profiles they could then use to target victims.”

Also notable from trends this year is a decline in the average lifespan of scams. Between 2020 and year to date 2024, the average number of days scams were active has significantly decreased, starting at 271 days for scams that began in 2020, and ending at 42 days so far for scams launched this year.

“Taken together, these two data points strongly suggest that scammers are pivoting away from elaborate Ponzi schemes that cast a wide net, to more targeted campaigns like romance scams or address poisonings,” said Eric Jardine, Cybercrime Research Lead at Chainalysis.