In a recent study published by leading blockchain analytics firm TRM Labs, the ongoing issue of fraud within the cryptocurrency industry is brought to light. In the report released in the latter days of last month, TRM Labs points to a staggering balance of $7.8 billion. According to the platform’s data, that is the exact amount lost to scammers in the crypto industry during 2022.
Researchers highlight that the top 10 cryptocurrency Ponzi schemes account for 54% of the total fraud amount. The company also identified the top three scam methods causing the most harm to crypto investors.
Pig Butchering
The method known as Pig Butchering involves psychological manipulation and is blended with social engineering techniques. Here, a long-term relationship is established with the person being defrauded, targeting their long-term investments with the aim of conducting long-term fraud.
It is also mentioned that a large portion of these scams involve USDT. Sometimes, it is stated that the defrauded person’s work and family relationships are also exploited. Especially, people met through social media carry a higher risk of implementing this scam.
In addition to this, the fact that defrauded individuals are hesitant and embarrassed to report it is preventing the acquisition of actual data. Despite this, Pig Butchering remains the highest percentage cryptocurrency scam.
Business Email Compromise
Business Email Compromise, also known as BEC, can be described as a method where scammers target specific business and institutional emails. In this context, victims who believe they have received emails from their work colleagues can be forced to transfer funds or similar situations can occur. According to a report by the FBI in 2022, this method caused a total loss of $2.7 billion.
Exit Scam
This method, directly associated with the crypto industry, is also known as a “rug pull”. When the founder of a token project takes all the liquidity from the project and runs away, or accomplishes this using different methods, an exit scam takes place. In this case, the biggest problem seems to be investors investing without conducting proper research.
