Romance scams were a brutal driver of illicit crypto activity last year, according to blockchain investigators at Chainalysis.
The blockchain intelligence platform’s 2024 Crypto Crime Report states that so-called “pig butchering scams” nearly doubled their revenue in 2023 compared to 2022, and have already multiplied by 85X since 2020.
The Size Of Crypto Romance Scams
That’s despite an aggregate decline in total value sent to scams at large, which also include giveaway scams, impersonation scams, and investment scams.
“This is especially concerning when we factor in that romance scams have the worst impact on victims of all scam types, based on average payment size,” Chainalysis wrote.
The firm’s data shows that the average romance scam payment size was $4,593. Given that victims often end up making multiple payments to the same scam address, the average losses per victim tend to be much larger than this figure.
By comparison, giveaway scams, impersonation scams, and investment scams saw average payments of $1,113, $948, $413 respectively. The next largest scams for average size were NFT scams, worth $3,095.
“Readers should keep in mind that some scams we categorize as generic investment scams are likely also engaging in romance scam tactics,” added Chainalysis.
In total, crypto scams in 2023 netted $4.6 billion, compared to $6.5 billion in 2022, and $10.8 billion in 2021.
Terrorism In Crypto
The report also cited ways that terrorist organizations were taking advantage of crypto transactions. It stated that money services businesses have become key facilitators of illicit crypto transactions for groups like Hezbollah.
However, calculating terror financing totals based on the flow of funds through these services risks vastly overestimating the total, my mixing legal transactions into the bunch.
“Government agencies with access to off-chain intelligence are more likely to detect these activities, and can leverage blockchain analysis tools to further investigate these financial flows,” wrote Chainalysis.