Not that the number isn't absurdly large, but there are a few reasons to think that estimate is about an order of magnitude too high.
The first of which is that Laos, Cambodia, and Myanmar all together only have a GDP of about $100 billion. 90% of these scams are run from that region of the world. The second is that these sorts of analyses end up unknowingly including the addresses of so-called "P2P exchangers" i.e. unlicensed but not necessarily entirely black market currency exchanges such as hawaladars. If one of the fraudsters converts their Tether to another currency with one of these exchangers, that address will be labelled as "fraud" even if all of the exchangers other customers are legitimate (informal money transfer systems are used for remittances in a lot of the world). The fact that unofficial exchangers often have business relationships with each other also even further complicates analyses that look solely at on-chain data. Lastly, no existing analysis, including by companies like Chainalysis, even comes close to $75 billion.
Keep in mind 75B is over 4 years the GDP numbers cited is for a single year .
The fact it is such a large portion of the GDP is one reason why these scam compounds are able to operate without getting shutdown , there is indirect support from government officials.
John Oliver mentioned it is as much as 50% of the GDP in Cambodia in a recent segment.
Romance scams are not new, but this has grown so quickly because of COVID , all these countries had sudden loss of tourism revenue, the gangs exploited desperate people to run these scams .
A vast majority of people scammed like this do not report to the authorities. They are too embarrassed to be scammed this way.
If victims don’t report then nothing gets labeled as fraud.
Also remember these scammers run exchange apps (fake-ish ones ) to fool people in losing more money by showing their investments going up and try to make you pay more as “tax” when you finally try to withdraw and so on .
The scam is crypto based, but the transactions don’t necessarily always happen in crypto at all, so analysis of chain alone is not sufficient to know the scale .
The $75 billion number comes from a study available on SSRN that did an analysis of data from Ethereum, Bitcoin, and Tron: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4742235. The study did not just look at reported victims, they basically started with a large sample of victim addresses and from there tried to derive the scammers' addresses and victim payments that were not reported using a handful of heuristics. You're right that it's over multiple years but even according to the study about 3/4 of the losses were from 2021-2022 if you look at Figure 9.
At 50% of GDP there would be serious economic distortion that would be reflected in statistics somewhere. There would probably at the very least be a massive countrywide construction boom, and not just of fenced compounds. I'm aware of how the scam works - I'm not denying it's huge, I just think those numbers are implausibly large.
> 75 billion number comes from a study available on SSRN
I am aware, I got the date range from page 2 of the study.
50% number came from the John Oliver segment [3] in which he refers to this UNODC report[4] (page 2 ).
> "Research carried out by UNODC to understand the illicit financial flows (IFFs) in the Mekong region suggests that the scam industry in one country in the region may be generating between USD7.5 and USD12.5 billion, which is half this country’s gross domestic product "
> least be a massive countrywide construction boom
Why should there be one? These countries are only base of operations, the operators are likely neither local nor spending the money in these countries. The scammers - the ones doing the talking are also victims, UN OHCR reports their numbers in hundreds of thousands [1][2].
There are lot of illicit money flowing through tiny regions with favorable governance like say Cayman islands or BVI it doesn't reflect in the local economy all that much. There is of course more than just money moving through here , there are also tens of thousands people working to do this but in most countries in this region few hundred thousand people are not significant and they are not paid much if at all.
Both report cite internal analysis, I am not saying UN sources can not be wrong, they of course can. However in the absence of strong counter data point I would trust it.
Way low. Only a small fraction gets reported. My elderly terminally-ill mom lost a couple hundred thousand and we never reported it. I assume most don't.
I really don't understand why more political pressure isn't put on backbone operators to blacklist more.
I've read that there was just a huge amount of fraud (hundreds of billions) in the payroll protection scheme, and that a lot of that fraud was virtual. How is 12.5 billion possibly the record?
>tech/customer support and government impersonation scams, targeting mostly the elderly, led to more than $1.3 billion in losses.
And in the U.S. at least, many of these elderly are very interested in trying to deduct these losses from their taxable income. As a skeptic, I think it is too tempting to claim "I was scammed out of $200K in digital assets" (which may have been purchased in the first place as part of the alleged scam) in order to actually hide those assets from family and/or the government.
It's an interesting idea, but I doubt that many are going through with reporting a fake digital scam loss to the FBI without a lot of them getting caught in basic blunders, especially when the FBI goes to trace and recover the funds..
Our perception of losses based on lying in circumstances where there are no consequences may be higher.
That would only apply if every single person who claimed they were a victim, was in fact a victim. I'm speculating that is not the case, because there are strong financial incentives to lie.
Maybe too subtle, but I'm saying there are some scammers who call themselves victims, to try to cover up their own scam. I don't see how "victim blaming" could apply in this case.
