Since the inception of Bitcoin in 2009, the cryptocurrency market has registered exponential growth. Cryptocurrency usage is snowballing; total transaction volume grew to US$15.8 trillion in 2021, up 567% from 2020, according to Chainalysis.
Given this roaring adoption, it is no surprise that the countenance of fraud and scam cases has grown. From year to year, more cybercriminals exploit cryptocurrencies to perform scams, some potentially untraceable.
To track the evolution of fraud cases and trends, we’ve compiled an overview of a wide range of cryptocurrency-related scams observed from 2019 to 2021.
In the process, we relied on the following questions: How did scams evolve over the years? Is the number of scam cases likely to decrease in the future, and what countermeasures can be applied to achieve this?
Let’s dive in.
2019: Year of the Ponzi scheme
2019’s cryptocurrency boom attracted significant attention from scammers. While cryptocurrency-based scam revenue dropped sharply to US$1.7 billion in 2018, scammers more than tripled their revenue in 2019, extorting US$4.3 billion worth of cryptocurrency from millions of victims. Note that the vast majority of the scam revenue came from Ponzi schemes, which accounted for 92% of the total.
What are Ponzi schemes?
Ponzi schemes are fraudulent investment scams that promise astronomical returns with little to zero risk. These schemes use the money collected from new investors to pay off early investors,…
