Thursday 28 Mar 2024
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KUALA LUMPUR (Dec 25): Scams were once again the largest form of cryptocurrency-based crime by transaction volume, with over US$7.7 billion (about RM32.3 billion) worth of cryptocurrencies taken from victims worldwide.

In a blog post on Dec 16, software company and blockchain data platform Chainalysis Inc said that represented a rise of 81% this year as compared to 2020, a year in which scamming activity dropped significantly as compared to 2019, in large part due to the absence of any large-scale Ponzi schemes.

The firm said that changed in 2021 with Finiko, a Ponzi scheme primarily targeting Russian speakers throughout Eastern Europe, netting more than US$1.1 billion from victims.

It said another change that contributed to 2021’s increase in scam revenue was the emergence of rug pulls, a relatively new scam type particularly common in the decentralised finance ecosystem, in which the developer of a cryptocurrency project — typically a new token — abandons it unexpectedly, taking users’ funds with them.

Chainalysis said that scamming, the largest form of cryptocurrency-based crime and one uniquely targeted towards new users, poses one of the biggest threats to continued adoption of cryptocurrencies.

However, it said some cryptocurrency businesses are taking innovative steps to leverage blockchain data to protect their users and nip scams in the bud before potential victims make deposits.

The firm explained, however, that the number of deposits to scam addresses fell from just under 10.7 million to 4.1 million, meaning that there were fewer individual scam victims.

Chainalysis said scammers’ money laundering strategies, however, hadn’t changed all that much.

It said as was the case in previous years, most cryptocurrencies sent from scam addresses ended up on mainstream exchanges.

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