UpdatesJun 30, 2023

Cryptocurrency Ponzi schemes consumed $7.8 billion last year

Investors scattered around the world have lost several billion dollars in total by allocating their funds to fraudulent cryptocurrency projects.

Last Thursday, June 28 this year, the popular company TRM Labs published its latest report, in which it presented detailed information on frauds operating under the guise of projects related to digital currencies. According to data provided by the above-mentioned analytical company, financial scams appearing in this sector have cost as much as USD 7.8 billion from affected investors from around the world. The indicated amount extorted by dishonest entrepreneurs refers only to 2022. Cryptocurrency funds lost as a result of a series of hacker attacks and the use of exploits have recently turned out to be much smaller.

Cryptocurrency scams led to investor losses of $7.8 billion in 2022

Although due to the prolonged slump in the digital currency sector, there was a significant investment slowdown last year, it did not stop scammers from exploring this space. The latest analytical studies clearly show that only in 2022, scammers managed to obtain billions of dollars from their victims.

TRM Labs, after completing its report, expressed the view that all the frauds (both financial pyramids and various types of exploits and hacks) led unwitting and reckless investors to losses amounting to as much as USD 9.04 billion.

Moreover, it is worth being aware that cryptocurrency scams related to fake virtual currency platforms increased during 2022 compared to the previous year by as much as 200%. This is because in 2021 they consumed an estimated amount of USD 907 million, while in 2022 it was as much as USD 2.57 billion.

The biggest cryptocurrency scams of 2022

According to the results from the report mentioned above, the largest amount of fraud was related to the TRON cryptocurrency blockchain network, as well as the use of Tether (USDT). In turn, the two biggest cryptocurrency scams are Forsage and Trade Coin Club. The first of these fraudulent schemes lured investors by repeatedly promising them high rates of return through Ethereum and BNB Smart Chain contracts. In this way, with the help of both indicated technological solutions, Forsage robbed investors of approximately USD 974 million.

In the case of the second scam, the mechanism to lure victims was to offer high returns on investments via an exchange related to the fraudulent project. In conclusion, it is worth adding that the Trade Coin Club robbed unsuspecting investors for about $ 295 million. Both companies were severely punished by the US securities regulator for their actions.