Scammers have long been prevalent in the cryptocurrency space, but to maintain their operations, they have recently modified their off- and on-chain strategies, according to a recent analysis from top blockchain analytics company Chainalysis.
According to Chainalysis’ 2024 Crypto Crime Mid-Year Update, scammers keep developing new tactics in tandem with the crypto sector’s advancements in security measures. Scammers are shifting their focus from large-scale Ponzi-style schemes to more focused fraudulent activities.
Pig butchering scams
This year, Chainalysis noticed an increase in pig butchering scams as con artists shifted from intricate Ponzi schemes to smaller, more focused attacks. Pig butchering scams get their name from the way thieves “fatten up” their victims to take as much money as possible. Usually, con artists use text messaging or dating apps to establish a love connection with their target before gradually persuading them to invest in a fraudulent offer.
This year, this kind of fraud has become more popular since the authorities issued several warnings about it. Chainalysis did point out that the people executing these frauds are frequently themselves victims, having been trafficked to Southeast Asia and made to work in makeshift camps inside large enclosures.
According to the blockchain analysis firm, a wallet connected to Myanmar’s notorious pig slaughtering facility, KK Park, has amassed over $100 million this year. Chainalysis says this cash may originate from ransom payments made by families trying to free their trafficking relatives and fraud victims.
The report said: “The KK Park wallet was first observed on-chain in 2022, and scamming operations using this address continue to generate significant revenue, netting over $100 million so far this year. Those funds could have come both from scam victims and from ransom payments submitted by families attempting to save their trafficked family members.
According to a 2024 investigation by Deutsche Welle, the German state-owned television, employees at KK Park perform 17-hour shifts and are frequently harassed, abused, and threatened with death if they try to flee the property.
Furthermore, Chainalysis noted that it’s crucial to remember that scam operations operating out of KK Park and comparable compounds are well-known for adapting their off-chain scam presence. They regularly buy experienced Facebook, Tinder, and Match.com profiles from Chinese services to utilize in their campaigns.
Shorter but impactful attacks
The research, the second in a series of mid-year updates from Chainalysis on cybercrimes, stated that thus far this year, the environment of cryptocurrency scams has seen “rapid evolution,” with fraudsters able to adapt both “on- and off-chain to conduct more devastating scams of shorter duration.”
Scams ran for a much shorter time on average between 2020 and 2024. Crypto frauds in 2020 might have lasted up to 271 days. Scams concluded 42 days on average this year.
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