Analysis: Cryptocurrencies Lost To COVID-19 Related Scams Are Decreasing Since Mid-March

Funds sent to cryptocurrencies scams exploiting the COVID-19 pandemic have decreased since the start of March. Scammers are using mostly phishing and blackmail emails, but their efforts have not marked much success as of late.

Crypto COVID-19 Scams

Aside from the many positive features cryptocurrencies possess, they are also sometimes involved in suspicious and fraudulent activities. The sudden outbreak of the coronavirus attracted numerous scams where the perpetrators requested digital assets to deceive victims.

New information from Chainalysis, indicates that in early March, when the virus intensified in the western world, scammers were making substantial amounts using it as bait. Since then, however, their profits from duped people have been decreasing.

The graph above represents the value of all cryptocurrencies sent to scam addresses, not just Bitcoin, the report explained. That value has dropped by 61% between March 13th and March 31st, though it has recovered slightly since then.

It’s worth noting, however, that the cryptocurrency market went through a turbulent period between those dates. Firstly, most assets plunged by up to 50% on March 13th, and they were recouping in the following weeks. Those price fluctuations could also reflect on the total value sent to fraudulent projects.

Methods Of Contact

According to the report, scammers are mainly using phishing and blackmail emails to initiate contact. The former is tricking victims by imitating a legitimate business, charity, or well-known individuals. For instance, they can impersonate the WHO or the CDC and request cryptocurrencies to help fight the virus. In other examples, the scammers claim to have valuable medical supplies or even remedies for COVID-19 available for sale.

With the blackmail contacts, on the other hand, scammers scare people that they have compromising information. They threaten to leak it to the victim’s friends and family unless they receive payments in cryptocurrency. The difference now is that the scammers claim to have COVID-19 and threaten to spread it to the victim’s family unless they pay up.

Fortunately, the report concluded that potential victims have not been sending significant amounts:

“Nothing separates this from the typical blackmail scam except that the specific threat being delivered relates to COVID-19. It’s a scary development to see in a time of crisis, but the addresses associated with COVID-19-centered scams that we’ve investigated have received very little money, suggesting these ploys haven’t been very successful yet.”