Study Reveals High Rate of Scam and Failed Crypto Projects in the US
Recent data analysis from 5Money and Storible has shed light on the prevalence of scam and failed cryptocurrency projects globally, with a significant focus on those originating from the United States.
Overview of the Study
Between January 2022 and October 2024, experts meticulously examined 1,544 cryptocurrency projects launched worldwide to identify patterns and trends in the industry. The findings underscored the alarming rate of scams and failures in certain countries.
US Leading in Scam Projects
The United States emerged as the epicenter of scam projects, with American founders accountable for 43% of all fraudulent ventures. This concentration was attributed to the sheer volume of crypto projects originating from the US and notable collapses like FTX in 2022.
Global Comparison
China and the United Kingdom followed the US in the list of scam project originators, contributing 8% and 7% respectively. In terms of failed projects, the US also held the lead with 33%, followed by China, the UK, South Korea, and Singapore.
Analysis of Scam Rates by Country
The analysis went further to pinpoint the nations with the highest rates of scam projects per total projects launched. Russia topped this list with 24% of Russian-developed projects flagged as scams, followed by Switzerland at 22% and China at 20%. Surprisingly, Vietnam also made it into the top ten with a dubious distinction.
Failure Rates and Regulatory Response
South Korea experienced the highest rate of failed crypto projects at 59%, despite a smaller overall project count compared to other nations. This trend prompted calls for global standards and stricter regulations to combat scams and failures in the industry.
Regulators worldwide have already taken steps to tighten oversight of the crypto sector, aiming to safeguard economic stability and protect investors. Initiatives such as finalizing crypto regulations in the UK by 2026 and implementing consumer protection measures in Singapore and South Korea highlight the proactive stance against fraudulent activities.
Implications for the Crypto Sector
The study’s findings corroborate previous reports that highlighted the challenges faced by crypto projects, particularly during the turbulent 2020-2023 period. The aftermath of FTX’s bankruptcy and the tough conditions of 2023 underscore the volatility and risks prevalent in the industry.
As the crypto sector navigates through regulatory uncertainties and market fluctuations, the focus on transparency, accountability, and investor protection remains paramount to ensuring its long-term viability.
