Crypto scammers are finding ways to adapt to the bear market despite revenue from scams halving last year, according to research from blockchain analysis firm Chainalysis.
A crypto crime webinar hosted by the company explained how scammers tend to shift their tactics as market conditions change.
Such tactics have allowed some scammers to continue to thrive, even though overall revenue from crypto scams fell by 46% in 2022.
Eric Jardine, cybercrime research lead at Chainalysis, explained:
“One of the new innovations in this year’s report was sub-classing scams into types. And there, what we discovered was that not all scams behaved the same way in the context of the bear market.“
Although high-profile investment scams like the Terra collapse drove rational investors away from the space in 2022, scammers adopted new strategies as the dust settled.
Romance scams, which rely more on emotional manipulation than financial promise, increased as investment scams declined.
Giveaway scams also spiked in this period, capitalising on victims’ greed and hopes of a quick win.
Jardine explained the scammers behaviour as such:
“It’s suggestive here that there is an adaptation on the part of the scammers and market conditions make investment scams unlikely to be profitable; they may be substituting their tactics toward other scams that play on different emotional sense.“
Chainalysis data suggests that when investment scams become ineffective and start to decrease, romance and giveaway scams rise.
As Jardine put it, scammers do not try to “play the same script over and over”, but instead change their scams to match conditions in the market.
The webinar also highlighted the Hyperverse multilevel marketing scam. One of the top scams of the year, it accounted for 22% of the $5.9 billion lost to scams in 2022, stealing roughly $1.3 billion from would-be investors.
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