Crypto fraud and scam activity tied to Japanese crypto exchanges declined substantially in the first half of 2024, according to a new report from Chainalysis.
The blockchain analytics firm’s published data revealed a 69% decrease in Ethereum (ETH) transactions linked to fraudulent activity and a nearly 50% drop in Bitcoin (BTC) compared to the previous year.
In 2023, Japanese exchanges processed $44.6 million in ETH and $11 million in BTC tied to scams. By mid-2024, these figures dropped to $13.7 million for ETH and $5.7 million for BTC. Additionally, ETH inflows from non-crypto-related fraud plummeted to just $1,171, while BTC-related fraud inflows halved to $18.8 million.
Chainalysis also observed a decline in fraudulent activity not directly related to crypto-native scams, including non-crypto-related fraud. ETH inflows from such activity dropped to just $1,171, while BTC fraud-related inflows halved to $18.8 million.
However, the firm noted an evolution in laundering tactics, including using cross-chain tools, consolidation wallets, and decentralized exchanges to convert crypto into stablecoins like Tether (USDT). The report highlighted the challenge of tracking money launderers due to the rapid creation of new wallet addresses and stressed the need for proactive measures to counter these strategies.
“Given the rapid pace at which money launderers create new wallet addresses, tracking them all in real-time is challenging. However, we can still identify common consolidation points from identified clusters to estimate the scale of these illicit activities,”
the report stated.
While crypto-related scams declined, fraud involving non-crypto digital payment systems is on the rise in Japan. Regional digital currencies controlled by local governments have become targets. In Osaka, seven individuals were reportedly arrested for using stolen credit cards to exploit “machikane points,” a municipal digital currency. The scheme involved fraudulent transactions to claim ¥2,500 ($345) in rewards for ¥50,000 ($6,900) purchases.
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