$7.8B lost in crypto ponzi and pyramid schemes in 2022: Report

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According to a report published by blockchain intelligence firm TRM Labs on June 28, a combined $7.8 billion was paid to cryptocurrency pyramid and Ponzi schemes worldwide in 2022. In addition, another $1.5 billion in crypto was alleged by TRM to have been spent on darknets for illicit activities, while another $3.7 billion in crypto was lost in hacks or exploits.

In total, $9.04 billion in crypto were sent to all types of financial fraud schemes, as alleged by TRM Labs. Despite a collapse in cryptocurrency prices from the ongoing bear market, it appears that there has been no corresponding slowdown in crypto-related crime. The firm wrote:

“Investment fraud centers on the solicitation of funds for fraudulent investments or projects; these often involve fake initial coin offerings (ICOs), unregistered securities or fraudulent investment platforms. Investment fraud involving cryptocurrency rose by nearly 200% from USD 907 million in 2021 to USD 2.57 billion in 2022.”

Researchers said that ten of the largest crypto Ponzi and pyramid schemes accounted for around 54% of the total amount. Moreover, an alleged 40% of the total incoming volume of investment fraud schemes active in 2022 was on Tron, mostly via Tether (USDT) issued on the blockchain, compared to just 17% in 2021.

Two of the largest crypto Ponzi schemes prosecuted in 2022 were Forsage and Trade Coin Club. Forsage lured investors with the promise of high returns through Ethereum ( $1,609.46 ) (ETH) and BNB ( $589.42 ) Chain contracts, netting nearly $974 million in investors’ money through two related entities. Meanwhile, Trade Coin Club claimed high returns through its cryptocurrency exchange, soliciting more than $295 million from over 100,000 investors before its collapse. Both firms have since been sanctioned by the U.S. Securities and Exchange Commission.