BeInCrypto takes a look at the top trends for cryptocurrency scams and the largest incidents of 2022.
Between January and November 2022, hackers absconded with $4.3 billion worth of cryptocurrency, according to a recent report. This accounts for a roughly 37% increase from 2021 year-on-year. But while the overall amount increased, 2022 had the lowest individual transfers to crypto scams over the past four years.
Trending Crypto Scams
Just like last year, most cryptocurrency hacks and scams in 2022 resulted from attacks on DeFi protocols, exchange platforms, and blockchain bridges. Roughly 72% of cryptocurrency stolen by hackers in 2021 came from DeFi protocols, while 21% of all crypto hacks that year exploited vulnerabilities in DeFi. This year, roughly 97% of all stolen cryptocurrency was acquired from DeFi protocols. Meanwhile, breaches on cross-chain bridges account for an estimated loss of $1.4 billion in 2022.
According to Solidus Labs, 2022 saw a 20% increase in crypto scams compared to 2021, with rugpulls growing in prominence. In 2021, investors lost $2.8 billion lost to rugpulls, in which investment funds are suddenly stolen by project creators. Meanwhile, 2022 had more than 188,000 incidents on various blockchains, such as BNB and Ethereum. Solidus Labs also reported that 12% of all BEP-20 tokens were linked to scams, meaning Binance’s BNB Chain experienced the most scams this year.
One type of cryptocurrency scam on the rise this year was so-called pig butchering, or romance schemes. In these instances, con artists will seduce a victim online and convince them to periodically invest in crypto, only to eventually block them and abscond with the funds.
According to a poll by Social Catfish, romance scams start on dating apps (35%), Facebook (10%), and other various apps. While victims lost over $139 million worth of crypto to these schemes in 2021, Americans lost $185 million worth of crypto to romance scams in Q1 2022 alone.
While Americans lost $329 million to cryptocurrency scams in Q1 2022, Australians lost $166 million throughout the year. Additionally, investors in Hong Kong lost $50 million to cryptocurrency scams in 2022. Meanwhile, hackers affiliated with North Korea have stolen around $1 billion worth of cryptocurrency from DeFi protocols.
Largest Incidents This Year
Yet as these forms of crypto scams proliferated this year, the biggest loss came from a far more trusted source. After cryptocurrency exchange FTX filed for bankruptcy, an investigation revealed that between $1-$2 billion of customer funds were missing. This makes it the largest cryptocurrency scam perpetrated this year.
However, the next two largest losses were attributed to more traditional means of crypto scamming mentioned above. In March, hackers stole some $615 million in USDC and Ethereum from Axie Infinity’s Ronin Network. The third largest loss took place early in February when a hacker exploited the Wormhole protocol for approximately $325 million in Ethereum.
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