Despite a roughly 46% drop in scam revenue due to the crypto winter, some scammers are adapting and thriving in this bear market.
Not all scams behave the same way
During a webinar focusing on crimes affecting consumers in the crypto world, Eric Jardine, cybercrime research lead at blockchain analytics firm Chainalysis, explained how scammers adapt their strategies to changing market situations.
Jardine noted that not all crypto scams behaved the same way, despite the overall decline in total crypto scam revenues in 2022. As Jardine said:
One of the new innovations in this year’s report was the categorization of scams into types. And that’s where we discovered that not all scams behaved the same way in the context of the bear market.
Scammers can change tactics
After the collapse of Terra in 2022, which left many crypto investors skeptical about investing, scammers have turned to other strategies such as fueling greed with free giveaway scams and playing on people’s emotions via romance scams. Jardine said the following:
It is suggestive here that there is an adjustment on the part of the scammers and that market conditions are unlikely to make investment scams profitable; they can replace their tactics with other scams that play on a different emotional feeling.
Jardine presented data suggesting that scammers are not simply “playing the same script over and over” and that they can change their tactics depending on the market situation. According to this data, romance and giveaway scams increase once investment scams are no longer effective.
In addition to these scams, the cybercrime professional highlighted that multi-level marketing scams also accounted for a large portion of the $5.9 billion lost to scams in 2022. Jardine showed that the hyperverse scam accounted for nearly $1.3 billion, which was about 22% of the total scam revenue that year.