Crypto Ponzi schemes caused $7.8 billion in losses in 2022, according to TRM Labs.

Crypto criminals have shifted their focus from bitcoin to other cryptocurrencies, according to a report released by blockchain analytics company TRM Labs on Wednesday.

Despite the decline in crypto prices over the past few years, scammers and hackers have continued to profit, as shown in the Elicit Crypto Ecosystem Report. Ponzi schemes related to cryptocurrencies have taken at least $7.8 billion from victims in 2022. In total, over $9 billion in crypto has been sent to addresses associated with various frauds and scams this year, including Ponzi schemes. These frauds often utilize USDT, a cryptocurrency based on the Tron blockchain.

Various DeFi (Decentralized Finance) exploits have earned attackers $3.7 billion, with $2 billion stolen from cross-chain bridges. Additionally, around $1.5 billion has been spent on darknet marketplaces selling illegal drugs, according to TRM.

To conceal their activities, crypto criminals are increasingly relying on a technique known as “chain hopping,” which involves transferring money from one blockchain to another in order to make it more difficult to trace the funds. As a result, the proportion of crimes involving bitcoin decreased from 97% in 2016 to 19% in 2022, as stated by TRM.

“In 2016, two-thirds of crypto hack volume was on Bitcoin; in 2022, it accounted for just under 3%, with Ethereum (68%) and Binance Smart Chain (19%) dominating the field,” the report stated. TRM also discovered that bitcoin is no longer the preferred cryptocurrency for financing terrorism; instead, USDT on the Tron blockchain has taken over that market. TRM noted that the cryptocurrency is particularly favored by ISIS and its affiliates in Pakistan and Tajikistan.

It’s worth noting that both bitcoin and tether (USDT) are among the most popular and liquid cryptocurrencies, making them a preferred method of payment for many legitimate use cases outside of criminal activities.

Read also: This Is How Scammers Can Drain Your Crypto Wallet

In certain corners of the criminal underworld, bitcoin still reigns supreme. For example, Russian darknet marketplaces, which dominate the sector (80% of the market), primarily accept bitcoin as payment for narcotics and other illegal goods. While large Western marketplaces of this kind also accept monero, their share in the overall darknet economy is much smaller, according to TRM.

Websites offering pornographic photos and videos of children, known as child sexual abuse materials (CSAM), received no less than $3.32 million in 2022. However, more than two-thirds of these funds did not go to actual CSAM vendors but to scammers who sold access to non-existent content, TRM stated.

Edited by Jeanhee Kim.

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