According to a report by TRM Labs, cryptocurrency pyramid and Ponzi schemes worldwide are estimated to result in a total payout of $7.8 billion in 2022. The report also highlights that $1.5 billion in cryptocurrency was used for illicit activities on the dark web, and $3.7 billion was lost to hacks or vulnerabilities. In total, $9.04 billion worth of cryptocurrencies has been involved in various forms of financial fraud.
Despite the bear market affecting cryptocurrency prices, TRM Labs suggests that cryptocurrency-related crime continues to thrive. Investment fraud, particularly through fraudulent initial coin offerings (ICOs), unregistered securities, or fraudulent investment platforms, is a significant concern. The report predicts that investment fraud involving cryptocurrencies will increase from $907 million in 2021 to $2.57 billion in 2022. a surge of almost 200%.
The researchers note that the top 10 crypto Ponzi and MLM schemes account for around 54% of the total amount involved in these fraudulent activities. Additionally, they highlight that 40% of active investment fraud schemes in 2022 will be on the Tron blockchain, primaril y using Tether issued on the blockchain. The report also mentions two major cryptocurrency Ponzi schemes prosecuted in 2022: Forsage and Trade Coin Club. Forsage attracted investors with the promise of high returns through Ethereum and BNB smart chain contracts, accumulating nearly $974 million through related entities. Trade Coin Club, an exchange claiming significant returns, raised over $295 million from more than 100.000 investors before its collapse. Both companies have faced sanctions from the SEC.
