The crypto-verse experienced a notable recovery in 2023, offering relief after the challenging bear market in 2022. Additionally, there is positive news regarding the decline in profits for crypto scammers. According to a recent report from Chainalysis, a blockchain security firm, cryptocurrency-related criminal activities have decreased by 65% compared to the previous year, highlighting a positive trend in 2023.
The Mid-Year Crypto Crime report from the firm highlighted a significant decrease in crypto scams. According to the report, scams have experienced a substantial decline of 77%, reducing from $3.3 billion to $1.1 billion in the first half of 2023. However, the report also reveals a resurgence in ransom attacks. These perpetrators were reportedly earning 62.4% more revenue than in the first half of 2022.
The persistence of this trend is concerning as it goes against the backdrop of a bleak prediction by Cybersecurity Ventures. In June, they estimated that ransomware attacks could cost victims a staggering $265 billion each year by 2031. If this projection holds true, it may have severe implications for the future.
The recent decline in crypto scams has caught many by surprise. Typically, bullish cycles in the cryptocurrency market are accompanied by an increase in fraudulent activities. However, in contrast to this trend, 2022 witnessed a record high in crypto crime, reaching $20.6 billion, despite enduring a bear market. Elaborating on the current state of the market, Chainalysis wrote,
“Usually, positive price movements translate to higher scam revenue, likely because increased market exuberance and FOMO make victims more susceptible to scammers’ pitches. But 2023’s drastic scam decline bucks that long-standing trend.”
Furthermore, there has been a significant decrease in hacks as well, with a decline of $1.1 billion during the first half of 2023 compared to the same period in 2022.
Also Read: 2022 Saw $20 Billion in Cryptocurrency Crimes
Crypto crime: Analyzing reasons behind this drop
The decrease in crypto scams can be attributed to several factors. One reason is that past victims have likely become more cautious and discerning in their investment choices, making them less susceptible to falling for fraudulent schemes. Furthermore, exchanges in the cryptocurrency industry have been implementing more robust security measures and stringent verification processes. These improvements have made it increasingly challenging for perpetrators to succeed in their illicit activities.
In addition, governments worldwide have been intensifying their efforts to address cryptocurrency-related issues. They no longer perceive the crypto industry as being in its infancy. For instance, a new task force in the United States, consisting of five federal enforcement agencies, has been established to collaboratively investigate crypto and darknet crimes. Likewise, governments in other countries have also been taking proactive measures. This is done to combat criminal activities associated with the crypto industry, aiming to limit their occurrence.
Also Read: US Federal Agencies Establish New Crypto Crimes Task Force