As a seasoned crypto investor with a decade of experience under my belt, these findings have made me more cautious than ever before. The United States, once a beacon of innovation and progress, now stands as the epicenter of scam projects and failed investments. This revelation is a bitter pill to swallow for someone who has seen firsthand the rise and fall of promising projects in this volatile market.
From January 2022 through October 2024, a significant number of failed cryptocurrency projects originated in the U.S., and it was American entrepreneurs who accounted for approximately 43% of all crypto schemes that proved to be fraudulent.
Based on research conducted by 5Money and Storible, it appears that many instances of fraudulent activities in the cryptocurrency world, as well as failed projects, are said to have their origins traced back to a few countries, such as the United States, China, and the United Kingdom.
1,544 different cryptocurrency initiatives worldwide were scrutinized by experts, covering the timeframe from January 2022 to October 2024.
As a crypto investor, I’ve noticed that a significant chunk of questionable projects originate from the United States, with American founders accounting for approximately 43% of all scam initiatives. This trend can be attributed to the high volume of crypto projects emerging from the U.S., as well as high-profile incidents like the collapse of FTX in 2022.
China and the United Kingdom follow, accounting for 8% and 7% of scam projects, respectively.
Among various countries, the United States holds the lead in the number of unsuccessful projects, making up approximately one-third (33%) of the total. China comes in second place with 7.63%, while the UK follows closely behind at 7.22%. Notably, South Korea and Singapore also appear on the list, each accounting for more than 6% of the total number of failed projects worldwide.
In rapidly developing markets, it’s more frequent to encounter fraudulent activities and unsuccessful ventures, according to the report.
Researchers looked at the ratio of scam cryptocurrency projects to the overall number of crypto projects launched by developers in each nation, to identify countries with the most instances of such fraudulent activities.
It was found that Russia had the most instances, approximately a quarter, of crypto projects launched by their developers being identified as scams. Coming in second was Switzerland, where one out of five projects was deemed a scam, followed closely by China with about 20%. Vietnam also entered the top ten with around 12% of its cryptocurrency initiatives labeled as fraudulent.
As a researcher, I’ve uncovered an interesting trend in the global cryptocurrency landscape: South Korea boasts the highest failure rate among crypto projects, with approximately 59% of its total projects being classified as ‘dead’. Despite having a smaller overall number compared to nations like the United States, this high failure rate is noteworthy.
In simple terms, Singapore had a 54% project failure rate, similar to that of over half of projects in the UK. Additionally, Canada and the Netherlands each saw 50% of their projects fail. Vietnam, on the other hand, ranked sixth globally with 42% of its launched projects ending unsuccessfully.
The study stressed the need for global standards and stricter regulations to address the prevalence of scams and failed projects.
Worldwide regulators are progressively strengthening their control over the cryptocurrency sector with the aim of preserving financial stability and enhancing investor safety. For example, the UK’s Financial Conduct Authority intends to establish comprehensive crypto regulations by 2026, while Singapore and South Korea have implemented strict investor protection policies.
New research aligns with an AlphaQuest report from February, indicating that more than three out of four cryptocurrency initiatives introduced during the 2020-2021 market surge had ceased operations by early 2024, and approximately one-third of these projects closed down shortly after FTX declared bankruptcy.
2023 stood out as a particularly challenging year for the cryptocurrency industry within the 2020-2023 period, as approximately 60% of defunct projects were eliminated mainly because of insufficient liquidity and minimal trading activity.
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2024-11-29 11:58