Crypto scammers ditch Ponzi schemes for emotionally manipulative scams, says Chainalysis

admin — Thu, 29 Aug 2024 15:27:46 +0000

Crypto scammers are shifting from large-scale Ponzi schemes to more focused strategies like emotionally manipulative pig butchering, work-from-home scams, drainers, and address poisoning, blockchain analytical firm Chainalysis stated in a new report

According to the firm, both on-chain and off-chain activity indicate that scammers are refining their tactics to conduct shorter and more profitable campaigns against crypto users.

Pig butchering

Chainalysis observed a rise in pig butchering scams this year as fraudsters move away from complex Ponzi schemes to these more targeted attacks.

Pig butchering scams are named for how criminals “fatten up” their victims to maximize the value they extract. Typically, scammers build a romantic relationship with the victim through text messages or dating apps, gradually convincing them to invest in a fake opportunity.

This type of scam has gained more notoriety this year, with the authorities extensively warning about them. However, Chainalysis noted that individuals behind these scams are often victims themselves as they are trafficked to Southeast Asia and forced to work in labor camps within large compounds to carry out these schemes.

The blockchain analytical firm pointed out that a wallet linked to Myanmar’s infamous pig butchering compound, KK Park, has accumulated over $100 million this year. Chainalysis suggests these funds could stem from both scam victims and ransom payments made by families attempting to rescue their trafficked relatives.

Money laundering

Meanwhile, Chainalysis highlighted the significant role Huione Guarantee, an online marketplace managed by a Cambodian conglomerate, plays in helping scammers launder their illicit funds.

According to the firm, the marketplace has processed $49 billion in crypto transactions, a substantial amount of which originated from pig butchering scams. It stated:

“Huione Guarantee appears heavily used for illicit crypto-based activities, including pig butchering, investment fraud, and money laundering.”

The marketplace has claimed neutrality for its users’ actions, saying it only acts as a facilitator. However, the platform allows its users to buy or sell almost anything, including digital assets, without regulating their transactions or scrutinizing the sources of the funds.

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Chainalysis: real estate and gaming rise in the metaverse

admin — Fri, 01 Jul 2022 07:51:44 +0000

Chainalysis has released its new report with the latest data and trends, recording that the real estate and gaming sectors continue to increase in the metaverse, thanks in part to NFTs and Virtual Reality (VR).

Chainalysis report on Web3: the rapid adoption of the metaverse

The real estate and gaming sectors are the hottest ones in the metaverse

Chainalysis’ new report titled “Real Estate and Gaming Are on the Rise in the Metaverse. VR and NFT Integrations Could Boost Them Further”, speaks volumes: rapid adoption of the metaverse is the latest trend in Web3, with data continuing to rise.

And indeed, Chainalysis recalls that Travis Scott’s Fortnite concert was attended by 27 million people. JP Morgan signed a one-year virtual property lease and the Vatican opened an NFT art gallery.

Not only that, the report states that real estate and gaming are on the rise in the metaverse. And the numbers seem to bear this out: from September 2019 to March 2022, blockchain-based virtual real estate prices grew by 879%, in contrast to “traditional” real estate, which, meanwhile, grew by 39%.

Gaming also does not lag behind: from 2017 to 2021, VR game revenue had a compound annual growth rate of 28.5%.

Chainalysis: growing real estate in the metaverse

Speaking of real estate, Chainalysis delved into the dynamics behind the industry’s growth in the metaverse today.

First, it describes the utilities of blockchain-based virtual real estate (VRE) that are thus present in the metaverse, offering current and future opportunities to the people who own them. These utilities can be embedded videos, images and interactive NFTs, game integration and learning, access to private events and restricted communities, and more.

Another important aspect that relates to the world of pricing refers to what kind of blockchain is being used. Compared to LAND in Ethereum-based metaverses, many prefer Solana or Polygon, since they have much lower entry prices.

Not only that, out of 11 Ethereum-based metaverses examined by Chainalysis, it was found that there is speculative activity. In fact, when analyzing the average duration in which users held their VRE NFT (or LAND), it appears that in 10 out of 11 metaverse projects, the duration was less than 25% of the time the NFT collection was active. Not only that, 6 out of 11 held it for less than 15%. In other words, VRE purchases in most of the projects mentioned would be best characterized as “flipping”.

The only exception is the OVR Land metaverse, which seems to have the longest-lasting NFT holders.

Metaverse and gaming

Finally, the Chainalysis report discusses the gaming sector, stating that here the key driver for growth in the metaverse is integrated Virtual Reality (VR), along with blockchain.

DappRadar recently reported that blockchain-based gaming activity has increased by 2,000% in the past year. In addition, blockchain-based game companies raised $2.5 billion in funding last quarter, a 150% increase from the previous quarter.

Also recently taking over the Web3 and metaverse world has been the team of developers of PlayStation games who appear to have created Ashfall, a new cross-platform Web3 game.

Not only that, Gala Games, a Web3 game company, also launched GRIT, the blockchain game on the Epic Games Store, available to the store’s more than 194 million users.

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