The good news is that fewer people are being fooled by cryptocurrency-based scams. The bad news is more people are just having their cryptocurrency outright stolen in hacks.
A recent report from
"One reason for this could be that with asset prices falling, cryptocurrency scams — which typically present themselves as passive crypto investing opportunities with enormous promised returns — are less enticing to potential victims. We also hypothesize that new, inexperienced users who are more likely to fall for scams are less prevalent in the market now that prices are declining, as opposed to when prices are rising and they're drawn in by hype and the promise of quick returns," said the report.
On the other hand, direct hacking attacks are seeing a major uptick. Between July 2021 and July 2022, the amount of revenue gained from old-fashioned theft rose from $1.2 billion to $1.9 billion. Much of this theft is linked to the rise of decentralized finance platforms, which Chainalysis said are, right now, particularly vulnerable to hacking because their open source code can easily be examined by hackers planning a heist.
And hackers are only getting started, unfortunately.
"We shouldn't expect theft to drop based on cryptocurrency market movements the way scamming does — 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. The only way to stop them is for the industry to shore up security and educate consumers on how to find safe projects to invest in. Law enforcement, meanwhile, must continue developing their ability to seize stolen cryptocurrency to the point that hacks are no longer worthwhile," said the report.
Chainalysis noted that North Korea specifically is responsible for about $1 billion of the $1.9 billion stolen this year.
