Between January 2022 and October 2024, most dead crypto projects were launched in the United States, while American founders were behind 43% of all crypto projects that turned out to be scams.
According to a study by 5Money and Storible, a large share of global scams and failed crypto projects reportedly originate from a handful of nations, including the United States, China, and the United Kingdom.
Experts analyzed data from 1,544 cryptocurrency projects launched globally between January 2022 and October 2024.
The United States tops the list, with American founders behind 43% of all scam projects. This was attributed to the high number of crypto projects launched in the U.S., as well as high-profile implosions, such as the collapse of FTX in 2022.
China and the United Kingdom follow, accounting for 8% and 7% of scam projects, respectively.
The U.S. also tops the list for failed projects, accounting for 33% of the total, followed by China at 7.63%, the UK at 7.22%, and South Korea and Singapore, each with over 6%.
“Scams and failed projects are more common in countries with strong market growth,” the report added.
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To determine the nations with the highest rate of scam crypto projects, researchers compared the number of scam projects launched by developers in each country to their total number of crypto projects.
Russia ranked the highest, with analysts concluding that 24% of all projects launched by Russian developers turned out to be scams. Swiss developers ranked second, with 22% of projects scams, followed by Chinese developers at 20%. Vietnam also made the top ten, with 12% of its crypto projects flagged as fraudulent.
Meanwhile, South Korea has the highest rate of failed crypto projects, with 59% of its total projects classified as dead, even though the overall number is smaller compared to countries like the United States.
Singapore closely followed with 54%, while over half of projects in the United Kingdom also failed. Canada and the Netherlands recorded a 50% failure rate, while Vietnam ranked sixth globally, with 42% of all projects launched in the nation ending up dead.
The study stressed the need for global standards and stricter regulations to address the prevalence of scams and failed projects.
Regulators across the globe have already begun tightening their grip on the crypto industry in a bid to ensure economic stability and bolster investor protection. For instance, the Financial Conduct Authority in the UK plans to finalize crypto regulations by 2026, while Singapore and South Korea have introduced stringent consumer protection measures.
The recent findings resonate with a February report by AlphaQuest, which revealed that over 70% of crypto projects launched during the 2020-2021 bull run were reported dead by early 2024, with 30% shutting down shortly after FTX filed for bankruptcy.
2023 was cited as the toughest year for the crypto sector in the 2020-2023 cycle, with almost 60% of the dead projects wiped out during that time primarily due to low liquidity and trading volume.
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