Since the very early days, back when people learned how to create new cryptocurrencies or quickly build infrastructure models like digital asset trading platforms, many scams started to spawn frequently. According to the blockchain surveillance company Chainalysis, over the last two years fraud in the Ethereum ecosystem has run rampant and it’s been the “cryptocurrency of choice for scams for a variety of reasons,” the company’s latest Ethereum report highlights.
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Scammers Flock to Ethereum Blockchain
The blockchain monitoring company Chainalysis has been releasing a series of reports concerning the recent “trends in crypto crime.” The firm’s report “Crypto Crime Series: Decoding Ethereum Scams” explains how ethereum (ETH) is the top choice for crypto-related scams throughout the ecosystem. In 2017, there was only $17 million worth of ETH stolen in scams but in 2018 roughly 0.01 percent of ETH was involved in swindles worth $36 million. “The number of scams declined through 2018, although those that remained were bigger, more sophisticated and vastly more lucrative,” the Chainalysis report details.
“From late 2016 through the end of 2018, Chainalysis has identified over 2,000 scam addresses on Ethereum that have received funds from nearly 40,000 unique users — Scam activity increased dramatically in 2018 with nearly 75% of scamming activity taking place that year,” the report explains.
There are four types of prevalent scams taking place within the Ethereum space – outright fraud, the ICO exit scam, a Ponzi product, and phishing attempts. Chainalysis also says the frequency and success rates of concepts like infection scams can change over time.
“Innovative criminals executed more complex Ponzi and ICO exit scams that generated millions of dollars in income — These more sophisticated schemes dominated the
