Home
News
- 1 Growing popularity and adoption of cryptocurrencies makes it attractive to illicit people.
- 2 Report suggests loss of over $9 Billion due to illegal activities in the crypto industry.
The broader cryptocurrency market evidently went through drastic loss in its value, given the crypto winter. Many crypto assets and crypto companies struggled during the phase and several had to lose ground. The already declining crypto industry also lost a significant amount due to ponzi and pyramid schemes in a single year. Research found the digital assets industry lost over $9 Billion overall.
According to the report published by blockchain intelligence firm, TRM Labs, on June 28, ponzi and pyramid schemes in crypto have resulted in a loss of about $7.8 Billion. Also, hacks or exploitations of cryptocurrency users have resulted in a loss of $3.7 Billion.
Additionally, the report also alleged the amount paid in crypto on darknets for illicit activities was $1.5 Billion. All these activities resulted in a loss of approx $9.04 Billion worth crypto assets.
The offerings of funds required to carry out fraud investments or projects, including fake initial coin offerings (ICOs), sale of unregistered securities or unauthentic investment platforms, etc., accounts for investment fraud. Frauds involving crypto assets were at $907 Million in 2021 and rose to $2.57 Billion in 2022, seeing a 200% rise.
Research suggests that about 54% of the total amount lost over ponzi and pyramid schemes were from ten big incidents. It also noted that out of the total investment fraud schemes volume last year, about 40% was on the Tron blockchain network. In comparison to last year, the amount was at 17%.
Crypto Hacks Decline in Q1 2023
Though the ponzi schemes surged last year, cryptocurrency hacks have seen a drop since the start of this year, according to another report from TRM Labs released last month. Earlier, it was reported crypto hacks were down in the first quarter of 2023. However, the report also highlighted the uncertainty for the hacking activities remaining down in the coming months of the year.
Crypto hacking is the stealing of crypto assets from users by either phishing or luring them to exchange their assets. Fraudsters employ sophisticated software tools to attract people.
Hacking incidents in the crypto industry were highest last year when it resulted in a loss of $3.8 Billion. In comparison to the stolen amounts through crypto hacks in Q1 2023 was less than any quarter of last year.
The report cited the crypto mixer, Tornado Cash, being sanctioned by the US Treasury and Mango Market exploiter Avraham Eisenberg’s arrest as the potential reason behind the fall in hacking activities.
The United States Department of Treasury sanctioned Tornado Cash in August, last year. The crypto mixer was charged for facilitating the laundering of $7 Billion worth crypto assets.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
