Crypto fraud revenue down 46% but romance scams are on the rise: Chainalysis 2022 report

Chainalysis, the leading blockchain analytics firm, reported a nearly 50% decline in crypto fraud in 2022.

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Crypto scams down almost 50% according to Chainalysis

On February 16, a leading blockchain analytics company Chainalysis published statistics and insights on 2022 crypto crime in its blog post, where it noted a significant decline in crypto scam revenues, from $10.9 billion the year prior to just $5.9 billion in 2022.

Chainalysis' experts saw a clear correlation between the overall decline in the value of cryptocurrencies, which began in early May last year, and fraud revenue. The connection between the dynamics of the Bitcoin price and scam inflows is particularly obvious.

Daily scam inflows vs. Bitcoin price chart
Source: Chainalysis

This is especially true for investment scams that lure cryptocurrency users into dubious crypto projects with the promise of outsized returns. Judging by statistical data, victims are unlikely to make such risky decisions when there is an obvious downward trend in cryptocurrency prices.

Read also: Chainalysis cuts 4.8% of global staff, insists it’s “well capitalized”

Interestingly, scammers tend to act counterintuitively. They prefer to accept victims’ payments in Bitcoin when cryptocurrency market goes red, and solicit stablecoins when it shows an upward trend.

The Chainalysis experts explained it as "a hedge against a possible market crash," adding that "scammers may also have better luck soliciting stablecoins in a bull market given that they have no price upside, while potential victims may be more inclined to hold their Bitcoin in the expectation it will go up in value."

According to the experts at Chainalysis, not all scam types track with the crypto asset value. A great example is a romance scam, which had the greatest victim deposit size of almost $16,000 in 2022. That's nearly three times the second-highest revenue per victim attributable to impersonation fraud. In 2022, the average deposit amount for such illegal activity was nearly $5,750.

Read also: Crypto scammers used $45M from investors to buy luxury goods

Romance scams are based on psychological manipulation. According to Chainalysis, such attacks are "more about building a personal relationship with the victim, and the scammer convincing them that they care about the victim and need their help. That kind of emotional pitch is probably equally effective regardless of trends in the wider market because the victim’s primary goal isn’t to get rich quick, but rather to help someone they believe to be a potential romantic partner."

Although the average deposit size of investment scam victims was about $996, more than 15 times lower than the revenue per victim of romance scams, the top ten crypto scams with the highest revenue in 2022 were all the investment scam type.

Chainalysis has also shared statistics on pump-and-dump schemes in a separate blog post, which reported a disturbing figure of 24.5% of tokens launched in 2022 being potential pump-and-dumps.