Earnings from crypto scams increased by 81% in 2021

Earnings from crypto scams increased by 81% in 2021

The explosion of "Rug Pulls" scams in the decentralized finance (DeFi) ecosystem over the past year has helped push revenue from crypto scams to $ 7.7 billion. According to blockchain data firm Chainalysis, 81% more than the previous year, with this type of scam accounting for 37% of all crypto scam revenue, up from 1% in 2020.

Rug Pull is a type of scam in which the bad guys drain liquidity from a protocol, leaving investors with no opportunity to act, first providing a "carpet", or the prospect of realizing great earning possibilities, crazy returns, etc. and then, all of a sudden, slipping it out from under users' feet and running away with all the money.

Although crypto scam revenues in 2021 represent a substantial increase over 2020, they are still down from the highs of 2019, when they approached $ 10 billion. And while the number of deposits to investment scam addresses dropped from 10.7 million in 2020 to 4.1 million in 2021, suggesting there have been fewer individual victims, it also indicates that the amount withdrawn from each victim has increased.

Photo credit - depositphotos .com

As in previous years, most cryptocurrencies sent by scam addresses have ended up in traditional crypto exchanges, a fact that has not been lost sight of by politicians and regulators, with Senator Elizabeth Warren among those pushing for more industry regulation.

However, there is some evidence that the cryptocurrency industry is maturing; the relationship between the prices of cryptocurrencies and the scam activity seems to have been interrupted. While previous bullish runs in 2017 and 2020 saw a surge in scam activity corresponding to an influx of new (and naive) users into the crypto ecosystem, 2021 saw scam activity flatten out even as the price of major cryptocurrencies Bitcoin and Ethereum has risen.

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