Study Finds Blackmail Leads in $20 Billion Bitcoin Scams

Study Finds Blackmail Leads in $20 Billion Bitcoin Scams

cryptocurrency world is not without its pitfalls. While only a small fraction
of crypto transactions are linked to illicit activities, the impact on
individual investors can be devastating. A new study by Coin Kickoff
sheds light on the most common types of Bitcoin scams, showing that blackmail
leads the pack. The average value of BTC received by scammers in the first half
of 2023 reached a whopping average of $1.66 million.

Crypto Numbers Tell a

In 2022, a
mere 0.24% of all cryptocurrency transactions were associated with illegal
activities. Although this percentage decreased from 1.9% in 2019, it still
represents a significant figure of $20.1 billion. The study also highlighted that the
number of reported scammers has nearly halved from 23,799 in 2021 to 12,354 in
2022. During the last quarter, the hackers’ activity also fell. However, the
financial impact remains high, with Bitcoin scammers receiving an average of
$1,664,899 in the first half of 2023 alone.

The most
common scams that can empty your crypto wallet are blackmail, sextortion, and
ransomware. Blackmail scams often involve threats to release personal data or
embarrassing photos unless a crypto payment is made. Sextortion scams prey on
younger victims, tricking them into sharing explicit content and then demanding
payment. Ransomware attacks lock up the victim’s data and demand cryptocurrency
for its release.

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your homework,” suggests Dr Marc Tomljanovich from Lombardo College of
Business, quoted in the study. „I strongly suggest that investors step
away from social media to get these information sources, and only come back
once they feel well informed.”

The types
of scams evolve over time. While blackmail has been the most reported scam
since 2018, ransomware scams are currently leading the pack in 2023. Investment
scams have also seen a decline as people become more aware of the risks
involved. However, giveaway scams have gained traction, often involving
scammers posing as celebrities to lure in victims.

The Financial Impact of Crypto

The total
value received by Bitcoin scammers peaked at $55.04 billion in 2021. This peak
may have been influenced by the boom in decentralized finance
transactions and related crimes. However, there has been a decline in
investment scams as law enforcement begins to catch up with advancements in
crypto technology.

report published by Comparitech at the end of August showed that
investors lost over $20 billion due to rug pulls, financial pyramids, and other
cryptocurrency scams.

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While the
percentage of cryptocurrency transactions linked to scams may seem small, the
financial and emotional toll on individual victims is significant. Awareness
and caution are the first steps in protecting yourself from becoming another
statistic in the growing list of crypto scam victims.

scams are an expensive and sometimes life-ruining nuisance that largely depends
on the foibles of human nature, be it the willingness to click an enticing link
on social media or to trust an 'investor’ who you never hear back from,”
the authors of the report concluded.

We don’t
have to look far for examples of such individuals. Finance Magnates
recently reported on a crypto kingpin sentenced to over a decade in prison
after running a $100 million Ponzi scheme for years. His activities had a
detrimental impact on the savings of thousands of individual investors.

Kickoff analyzed 251,806 abuse reports sourced from These
reports were associated with 87,722 unique blockchain addresses. After
eliminating redundant reports submitted by the same user about identical scams
linked to the same blockchain address, the study focused on 232,455 unique
abuse reports spanning from 2018 to June 2023.

This article was written by Damian Chmiel at

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