Data released by Chainalysis, a blockchain surveillance company, shows that Ethereum (ETH) is the cryptocurrency of choice for scammers for a variety of reasons. The past two years have seen more scam projects using the Ethereum blockchain pop up according to the firm.
The revelation comes in the latest edition of the “Crypto Crime Series: Decoding Ethereum Scams” where Chainalysis has been tracking recent trends in crypto crime. It details how Ethereum (ETH) has been the top choice for fraudsters within the crypto space.
Around 924 Scams Are Actively Using Ethereum (ETH)
According to the firm, in 2017 there was only $17 million in ETH that was stolen through scams. But, this value more than doubled in 2018 with $36 million in ETH lost through scams.
However, the report notes that “the number of scams declined through 2018, although those that remained were bigger, more sophisticated and vastly more lucrative.”
The report adds:
“From late 2016 through the end of 2018, Chainlysis has identified over 2,000 scam addresses on Ethereum that have received funds from nearly 40,000 unique users — Scam activity increased dramatically in 2018 with nearly 75% of scamming activity taking place that year.”
If you are wondering the type of scams that have been popular on the Ethereum platform, they fall into four categories, ICO exit scams, outright fraud, phishing attempts, and Ponzi products.
According to the report, innovative crooks are responsible for executing more complex Ponzi schemes and ICO exit scams which have generated millions of dollars for the scammers. It’s these type of scams that dominated the second half of 2018.
Etherscam is another site that tracks scams projects using Ethereum (ETH). The site has managed to record 6,378 scams with 924 active projects ever since it began operation.
What’s your take on Ethereum (ETH) being the crypto of choice for scammers? Share your thoughts in the comment section below.