A recent report by Chainalysis sheds light on how cryptocurrency crimes are changing. While scams have brought in less money compared to before, there’s been a rise in approval phishing and romance scams.
According to the report, cryptocurrency scams made at least $4.6 billion in 2023, which is lower than the year before. But Chainalysis suggests these numbers might be even higher.
As more details come out, similar to what happened in the 2022 report, the actual money made from cryptocurrency scams could be more than what was first reported.
Approval phishing is a sneaky trick where scammers get people to approve harmful blockchain transactions, giving them access to tokens in their victims’ wallets. This way, scammers can take cryptocurrency by deceiving people into approving transactions.
Romance scams involve tricking individuals by pretending to be potential romantic partners. Scammers build fake relationships, gain trust, and then ask for money or help under pretenses.
Resilience of romance scammers
Additionally, the report shows the increasing sophistication of scammers, with a focus on romance scammers. Romance scams, also referred to as “pig butchering” scams, now involve communicating with victims through private channels, which makes it difficult to trace the addresses associated with the fraudulent activities.
This use of private communication channels and the reluctance of victims to report incidents hinder efforts to monitor and combat romance scams effectively. Hence, there is a need for increased awareness, education, and cooperation between individuals and law enforcement to address the complexities of these deceptive schemes.
The report also shows that pig butchering gangs are connected, tying together ransom activities and romance scams. These gangs not only cause financial harm but also contribute to a humanitarian crisis by exploiting victims in harsh conditions.
Combating crypto scams
Chainalysis also revealed that significant progress has been made in combating scam activities involving cryptocurrencies. It mentioned how Tether and OKX have joined forces with the U.S. Department of Justice to freeze $225 million connected to an international human trafficking syndicate.
Furthermore, in late 2023, an Interpol operation spearheaded by South Korea resulted in the apprehension of 3,500 cybercriminals engaged in online scams. During the operation, authorities successfully seized a total of $300 million, which included $100 million in digital assets.
The report stressed the need for cooperation between businesses and law enforcement to keep the cryptocurrency space secure and prevent its misuse for illegal activities.
