TRM Labs' estimates that in 2022, the crypto industry lost $9.04 billion in various financial frauds.
Cryptocurrency enthusiasts suffered a hefty blow in 2022 as a pyramid and Ponzi schemes worldwide saw a collective sum of $7.8 billion in losses.
The stunning figure was part of a report released on June 28th by the blockchain intelligence agency TRM Labs. Despite the bearish market trends impacting cryptocurrency prices, the report indicates a troubling increase in crypto-associated fraudulent activities.
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TRM Labs' report noted that, in addition to the losses from Ponzi and pyramid schemes, the crypto space also witnessed another $1.5 billion allegedly spent on darknets for unlawful activities.
Furthermore, an alarming $3.7 billion in crypto vanished due to hacks or exploits. The firm, therefore, estimated that during 2022, the crypto industry lost $9.04 billion in various financial frauds.
In the report, the firm expressed concern over the escalating investment fraud related to cryptocurrencies.
Investment fraud centers on the solicitation of funds for fraudulent investments or projects; these often involve fake initial coin offerings (ICOs), unregistered securities, or fraudulent investment platforms. Investment fraud involving cryptocurrency rose by nearly 200% from USD 907 million in 2021 to USD 2.57 billion in 2022.
The study highlighted that a few significant actors were responsible for a large chunk of these fraudulent activities. The ten most substantial crypto Ponzi and pyramid schemes accounted for nearly 54% of the overall sum.
Alarmingly, there was a stark increase in fraudulent schemes on the Tron blockchain, with Tether (USDT) being the primary tube. Around 40% of the total volume of investment fraud schemes in 2022 were active on Tron, a considerable jump from just 17% in 2021.
The report highlighted that the two most notorious Ponzi schemes in 2022, Forsage and Trade Coin Club, stole around $1.3 billion from investors. Forsage enticed investors with the potential of high returns through Ethereum and BNB Smart Chain contracts, amassing nearly $974 million from investors.
Meanwhile, Trade Coin Club lured over 100,000 investors, accumulating over $295 million with promises of high yields through its cryptocurrency exchange.
The report by TRM Labs underscores the urgent need for more robust security measures and vigilance among crypto users to combat the increasing rate of financial scams within the digital currency sphere.
In other news, on June 27th, the Web3 portfolio app De.Fi published a report revealing that the DeFi ecosystem lost over $204 million in various scams and hacks.
