Illicit crypto activity more resilient than legitimate demand
Despite the cryptosphere going through a harsh winter the sector maintains its attractiveness to one sector – illicit users. According to Chainalysis’ Mid-year Crypto Crime Update report, criminal activity appears to be more resilient in the face of price declines: Illicit volumes are down just 15% year-on-year, compared to 36% for legitimate volumes. This is not true across the board. Some forms of crypto-based crime have actually increased in 2022, while others declined. Total scam revenue for 2022 currently sits at $1.6bn, 65% lower than July 2021, however, the market capitalization of the crypto sector has also fallen by roughly 70% since November. Scam revenue has fallen more or less in line with BTC pricing since January. According to Chainalysis, the cumulative number of individual transfers to scams so far in 2022 is the lowest in the past four years. The report suggests that less enticing crypto returns led to fewer people falling for the crypto scams. It added that inexperienced users who are more likely to fall for scams are also less prevalent now that prices are declining. A large number of the successful scams were the product of outlier scams like JuicyFields.io and OmegaPro.world. Both schemes were responsible for over a third of all crypto scams after the first six months of 2022, with JuicyFields.io netting over $270m.