Without equivocation, 2021 was one of the most successful years for bad actors as they took home billions of dollars. According to Chainalysis’s estimation of the value of crypto scams, scammers profited over $14 billion in 2021.
This figure, however, confirms that scammers made a lot of wealth from their business in the year compared to 2020. At that time, their profit halved the current figure and stemmed from various niches in crypto.
While that 2021 record was massive, the trend has still not stopped in 2022. In fact, the 2022 crypto scams’ value may surpass the previous year, considering the pace it moves. This is because scammers have introduced new tools capable enough to steal massively and conveniently from unsuspecting individuals.
Previously, hacking of wallets, exchanges, DeFi platforms, NFT projects, and DAOs was the most common method of stealing. Although these methods still exist and have continued to profit scammers even in 2022, there are new tools for stealing.
Rebranded Ponzi is the new tool
Although reports may not capture all, one such new tools that scammers have successfully utilized in 2022 are Ponzi schemes. This usually comes like a genuine investment. It runs for some time, stops abruptly, turns out a scam, and runs away with much value.
You may want to argue that Ponzi has existed before. There is no doubt about that. You may even start questioning how these Ponzi schemes successfully scammed people despite the level of awareness around Ponzi.
The key is that those scammers have gone beyond the ordinary to perpetrate crypto scams. They have now rebranded the scheme to make it look real in stealing massive funds.
How they operate
As earlier said, they come like genuine investments. To make it look different, they tie the platforms to notable companies, like Alibaba, 11street, eBay, Amazon, etc.
They parade the investment platforms as the affiliate program of the above-mentioned giant e-commerce platforms. Their aim at this is to give a false impression or value to potential investors to trust them.
Having trusted them, the journey into these crypto scams begins with victims signing up and depositing USDT (ERC-20 or TRC20). After registration, the platform expect victims to perform some tasks daily. They call these tasks “ORDERS,” which every valid member must complete daily.
Deposits on these platforms are in tiers. It usually ranges from $100, $500, $2,000, $5k, $10k, and $20k. This means you can invest with any of this amount, but your investment determines the value of your earnings. A depositor of $100 will earn $4 to 5$, while those with huge funds like $2k will profit $400 daily.
They design their withdrawal process in such a way that reflects real crypto investment platforms. It has a withdrawal limit, and every member will pay a gas fee each time they want to withdraw their funds.
In the end, these platforms will stop payment or go offline without informing users. The likes of 11street, Alibaba, and many other investment platforms have proven to be crypto scams, having ran away with investors’ funds.
Value of crypto scams and victims
No one can ascertain the actual figure investors have lost to these rebranded Ponzi schemes.
However, a cursory look at the Telegram channels of these two platforms could give a clue of these crypto scams. They have nearly 100,000 members collectively. 11street has over 65,000 members, while Alibaba has a little over 32,000 members.
We can now calculate that a $100 deposit from all of these members will amount to $9.7million. Meanwhile, some of the investors deposited more than this. Very many of them invested hugely and lost all.
Apart from the platforms mentioned above, several others are preparing to run away with investors’ funds. There is no doubt that if this continues, the value of crypto scams in 2022 will surpass that of 2021.
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