Cryptocurrency scammers may be taking advantage of coronavirus to invent new fraudulent narratives, but their profits have declined since the outbreak of the pandemic because of a drop in crypto market prices, according to blockchain analysis firm Chainalysis.
In an April 10 report by Chainalysis, researchers found that the coronavirus pandemic has triggered an increase in the prevalence of phishing and blackmail scams. The former refers to scam activities where victims are tricked into sending over their wallet credentials under false pretense. Right now, some scammers are posing as charity organizations to collect cryptocurrency donations and ask victims to give up their personal information. Blackmail scams have also grown in numbers; some fraudsters are threatening to give coronavirus to the victims’ families if they don’t pay up.
But despite the rise of phishing and blackmail activities, the overall value of cryptocurrency sent to scammers has dropped by 61% between March 13 and 31. This is caused by the decline of investment scams and Ponzi schemes – two biggest cryptocurrency scam categories that collectively make up around 95% of scam payments last year.
However, the report found that the 61% decline is almost completely due to the decrease of cryptocurrency price.
Around the same number of victims are sending the same amount of cryptocurrency to scammers, but the payments simply worth less now that the price of the coins has dropped.