Chainalysis, a start-up involved in cryptocurrency crime tracking recently submitted a report to Forbes, revealing a 33% drop in the weekly average revenue made by bitcoin scammers (in terms of cryptocurrency’s dollar value) during the month starting from March 8 till April 10. Average earnings of cryptocurrency Ponzi schemes, dodgy cryptocurrency companies, and investment scams decreased from $ 4.2 million to $ 2.9 million a week.
Ample data to connect the loss of cryptocurrency scam revenue with Covid-19
In March the US Federal Deposit Insurance Corp and Federal Trade Commission issued warnings to the US citizens. They urged them to remain cautious as scammers were using all kinds of methods, including COVID-19 to steal their money.
Although the report doesn’t delve into the effectiveness of scams in the world of fiat currencies, it provided ample data revealing that the money made by cryptocurrency scams had decreased since the second week of March. This was after the COVID-19 crisis went from bad to worse in the Western world.
Why the loss of revenue for dubious cryptocurrency companies?
Ponzi schemes and investment scams received 95% of all money made through different cryptocurrency scam types in the year 2019. Most of these schemes/scams pitch new cryptocurrency businesses or tokens to innocent customers, promising them high returns.
Their message these days is aimed at fooling investors already witnessing major price drops in the cryptocurrency market. In addition, these scammers expect concerns surrounding the economic downturn to further fuel investors’ desperation. However, the figures suggest otherwise.
So, why the 33% drop in weekly average earnings?
The most likely reason appears to be how these investment scams and Ponzi schemes solicit money from their victims. Most seek a small flat amount through their ads running on self-owned portals, social media websites, YouTube and email. The idea is that the scammers continue to receive the same amount of payments from almost the same number of people each month. But now, due to the devaluation of crypto, they are getting less than they did before the pandemic.
While there have been positives like more family time and lower air pollution, Coronavirus scams have also increased since March. However, the devaluation of cryptocurrencies, including bitcoin, has ensured that the scammers are making way less than they hoped.
Fast Offshore works with a number of cryptocurrency and blockchain companies throughout the world. Transparency, honesty, ethics, and adherence to regulations are at the core of what we are about and we don’t work with anyone we suspect of dubious activities. Instead, we work with our clients to get the necessary licenses, incorporations and business structures they need to survive. To find out more about our cryptocurrency and blockchain services, get in touch with us today!