Cryptocurrency Investment Fraud Surged in 2022
Plus: The Rise of Web3 Super Apps and What They Mean for Decentralized Applications
Good morning apes,
If you thought things will go back to normal after the FTX scandal is resolved, think again. The FBI has reported record losses from cryptocurrency scams. Keep reading to find out more!
🍿 Quick Snack
🚨 Cryptocurrency investment fraud has surged, resulting in reported losses of $2.57 billion in 2022, a 183% increase from the previous year. Scams such as liquidity mining, hacked social media, impersonating celebrities, real estate fraud, and fake job offers are to blame.
📱A look at how Web3 applications, such as those offered by Upland, Omni, and EMG, could be the next generation of super apps thanks to their decentralized nature.
🎮 Web3 gaming industry leaders predict a huge increase in gamers in the next 1-2 years and over $100 billion spent annually on in-game items with the rise of NFTs redefining digital ownership and facilitating its transfer of value.
🍟 Extra Fries: Microsoft, Clinique, and Baron Davis are among the latest companies and individuals to announce their entry into the Web3 space.
🍔 The Full Meal
Investment Fraud on the Rise: Top 5 Cryptocurrency Scams of 2022
In 2022, investment scams were the costliest scheme reported to the FBI’s Internet Crime Complain Centre (IC3), with a total of $3.31 billion reported in investment fraud complaints, an increase of 127% from the previous year.
Cryptocurrency investment fraud complaints increased from $907 million in 2021 to $2.57 billion in 2022, an increase of 183%.
Many victims of cryptocurrency investment scams have assumed massive debt to cover their losses, and the most targeted age group is victims aged 30 to 49.
Variations of cryptocurrency investment scams reported in 2022 include:
Liquidity mining: victims link their cryptocurrency wallets to a fraudulent liquidity mining application, and scammers wipe out their funds without notification or permission.
Hacked social media: scammers use hacked accounts to perpetrate a fraudulent investment opportunity using cryptocurrency, targeting the friends of the hacked user.
Celebrity impersonation: scammers impersonate well-known celebrities or social figures, feigning a friendship with the targeted victim who is eventually enticed to learn how to invest in cryptocurrency.
Real estate professionals: scammers contact real estate agents offering to buy expensive properties for cash or cryptocurrency. Once engaged, the fraudster will expose their control of fictitious accounts with purported value of millions of dollars to entice them to engage in their investment scheme.
Fraudulent employment offers: victims apply for fake positions online at an investment firm or company supposedly affiliated with investing. Instead of a job, the victims are offered fraudulent investment advice designed to retrieve as much money from the target as possible.
The Rise of Web3 Super Apps
Super apps are applications that offer access to many different kinds of services, with WeChat and AliPay being the original examples from China.
Super apps have not yet become popular in the West, where users tend to be wary of giving too much personal information to a single company.
Web3 applications, however, are decentralized and often owned by users, which means they could be fertile ground for the next generation of super apps.
The Web3 super app's decentralized nature is fueling this trend even more, as users no longer have to worry about being exploited by advertising platforms.
Some interesting platforms vying for the title of Web3 super app include:
Upland: a virtual world that offers numerous services, and has built a crypto-based economy. The platform has over 3 million users at the moment.
Omni: a full-service, self-custody Web3 wallet that makes staking simple and accessible, and provides vital protection for users.
EMG: a super app offering a single hub for numerous financial and communication services, and targets business users.
The Future of Web3 Gaming
Web3 gaming industry leaders predict that the next 10 to 100 million gamers will be added to the space in the next 1-2 years
The market for web3 games is potentially large, with over $100 billion spent annually by players on in-game items (e.g. skins, costumes, and in-game currencies)
Recently, Immutable and Polygon have formed a strategic partnership to accelerate innovation and adoption in the crypto gaming space.
The alliance will focus on making web3-enabled games faster, easier, and less risky for larger gaming studios and independent developers to get involved.
More spicy gaming news: Sony has filed a patent that hints they might be interested in NFTs. The patent shows a framework that would allow players to earn NFTs in the form of exclusive skins and other content, which could then be traded and transferred across different consoles and platforms.
The rise of NFTs in gaming cannot be ignored. It is redefining digital ownership and facilitating its transfer of value. Do you agree?
🍟 Extra Fries
Tech giant Microsoft has launched a new Ethereum-powered, non-custodial web3 wallet that allows users to send and receive crypto and NFTs. The wallet is currently in a limited test phase, available to Microsoft Edge Channel users. (Read More)
Jennifer and Kevin McCoy, creators of the first art NFT ever created, are releasing their first NFT collection, Land Sea and Sky, which combines elements of AI-generated landscapes. The project launches on Artwrld on April 5 and is a collection of 310 collages. (Read More)
Baron Davis, former NBA player, is launching a sports lifestyle in culture platform, SLiC, which aims to connect fans and creators. The first vertical of SLiC will be SLiC Images, a decentralized platform and file storage product for photographers. Davis believes that Web3 technology can empower creators and athletes to engage with their communities, and that social tokens and utility tokens have distinct use cases. (Read More)
Clinique has launched Clinique Lab, a digital laboratory that combines retail with edutainment. The all-immersive, multi-sensory gamified experience includes a museum spotlighting Clinique's history and a skin school offering both video tutorials and interactive diagnostics. The mobile-optimized experience has elements of gamification to speak to the target Gen-Z demographic and offers a personalized experience both in the avatar and the way users engage with it. (Read More)
Harmony ecosystem partner Hidden State has launched the world's first integrated platform for Web2 domain names and Web3 profiles, called 1.country. It is the first platform that allows users to connect a Web3 name with a browsable Web2 domain, and users can buy a domain name without incurring high fees. (Read More)
Over 80 foreign and Mainland China companies are interested in establishing a Web3 company in Hong Kong ahead of new crypto regulations taking effect from June. The companies had expressed interest in opening a Hong Kong branch since October last year. Hong Kong has also allocated HK$50 million (US$6.4 million) in annual budget spending to the growth of the Web3 ecosystem. (Read More)
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