Blockchain Analysis Firm Reveals Illicit Losses in Crypto Space

TRM Labs, a leading blockchain analysis firm focused on preventing cybercrime, has released a comprehensive report on the illicit sums lost to bad actors in the crypto space in 2022.

Declining Market Prices Do Not Deter Scams and Thefts

Even with the declining prices and interest in the market last year, the number of scams and thefts in the industry has not significantly decreased. It remains in proportion to similar cases in previous years despite the plummeting value of various digital assets due to crypto winter and the numerous collapses that accompanied it.

DeFi Exploits and Losses

In 2021, over $12 billion were lost to DeFi exploits. Although the $3.7 billion lost to exploits in 2022 may seem small in comparison, it’s important to note that the $12 billion represents a sevenfold increase in DeFi exploits over the previous year, making 2022 an outlier. Each incident in 2022 resulted in an average loss of $20 million for the investors of the exploited projects. It’s worth noting that protocol exploits accounted for only about 10% of cyberattacks in 2022, with the remaining 90% targeting the rest of the platforms’ infrastructure.

Investors Still Falling for Illicit Platforms

In 2022, pyramid schemes and similar Ponzi platforms caused a loss of about $7.8 billion. When other scams like romance frauds and phishing attacks are included, the total loss in the crypto community amounted to over $9 billion in 2022 alone. The number of fraudulent investment platforms and tokens doubled in 2022, resulting in a total of $2.57 billion worth of crypto being stolen from investors worldwide. Pyramid schemes accounted for the largest loss, with about $7.8 billion disappearing overnight once they were unable to recruit new victims. The top 10 pyramid schemes made up 54% of the total loss, with Forsage, the Trade Coin Club, and Bitconnect being the largest collapses in 2022. About 40% of pyramid schemes in 2022 occurred on the TRON network, mostly involving USDT.

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Illicit Markets Generate Less Revenue than Fraud

Illicit markets, although highly illegal, only generated about $1.5 billion in revenue for bad actors, significantly less than the amount generated by outright fraud.

By Team

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