Chainalysis: Here’s Where the Most Crypto Scams Are Happening

A new report from insights firm Chainalysis is shedding light on where the most crypto scams are happening around the world.

The report focuses on crypto-related crimes in Eastern Europe, which Chainalysis says is second for illicit crypto activity behind Africa.

The firm gathers data showing the amount of exposure that addresses in each region have to illicit addresses.

Chainalysis notes that Eastern Europe sends more crypto to illegal darknet markets than anywhere else largely because of Hydra Market, the world’s biggest darknet market which caters to Russian-speakers in the region.

But overall, most illicit crypto transactions in Eastern Europe are tied to scams, rather than online black markets.

“As is the case with all regions, scams make up the biggest share of funds sent from Eastern Europe to illicit addresses – we can assume that most of this activity represents victims sending money to scammers. Between June 2020 and July 2021, Eastern Europe-based addresses sent $815 million to scams, second only to Western Europe.”

Chainalysis also says that Eastern Europe sends the most amount of web traffic to crypto-related scam websites, followed by Central and Southern Asia and Latin America.

The firm names Ukraine as the country which most visits crypto scam websites, surpassing the United States despite its modest population of roughly 44 million.

Chainalysis says that capturing the lion’s share of crypto-related scams is Finiko, a Russian-based company that was deemed a Ponzi scheme by the Russian central bank and saw its founder arrested in July. Finiko is alleged to have received over $1.5 billion in Bitcoin (BTC) through more than 800,000 separate deposits.

Finiko is one of nearly a dozen perpetrators Chainalysis identifies in a list of top 5 crypto scams within each region of the world.