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Crypto scams in 2024: A turn for the better or calm before the storm?

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In January 2024 alone, cryptocurrency projects lost $127 million due to hacking and fraud – six times more than in January 2023 and three times more than last December. In the meantime, losses in the crypto industry from breaches in 2023 decreased by more than half compared to 2022. Should we expect this decline to continue – or are we on the verge of a new scam outbreak?

The Number of Crypto Scams Has Declined

From January to November 2023, cybercriminals stole about $1.7 billion in 160 attacks – while the figure amounted to nearly $4 billion in 2022, according to TRM Labs data. Chainalysis reports similar numbers and adds that by the end of 2023, the volume of crypto fraud proceeds decreased by 29.2%. The organization notes that the illicit transaction volume decreased for the first time since 2020.

Factors influencing the decline of hacks

Here are three key factors that may have contributed to reducing crypto industry losses from hacks in 2023:

Enhanced security measures, including real-time transaction monitoring and anomaly detection systems;
Increased law enforcement efforts around the world to address cybercrime involving digital currencies;
Increased industry coordination, with crypto exchanges, wallet providers, and blockchain networks more actively sharing information about vulnerabilities and threats.

Since DeFi protocols have become more secure, the revenues of the leading hacker groups have decreased. For example, the income of the notorious Lazarus and Kimsuky groups dropped from $1.7 billion in 2023 to $1 billion in 2023, although the number of platforms they attacked increased.

Market Cycle vs. Crypto Scams

The decline of crypto scams since 2021 correlates with the decreased market activity. We have been trying to get ourselves out of the crypto winter for the last two years, and people have been extremely cautious about their money. On the contrary, bull runs are when the fear of missing out drives mass users – so it’s easy to fall for fraudulent suggestion

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Author: Slava Demchuk

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