US, China, and UK lead in scam and dead crypto project launches: report

While most dead crypto projects between January 2022 and October 2024 were launched in the US, 43% of all crypto projects that turned out to be scams had American founders behind them.

According to a study by 5Money and Storible, the bulk of global scams and failed crypto projects reportedly originate from a handful of countries, including the United States, China, and the United Kingdom.

Experts analyzed data from 1,544 cryptocurrency projects launched worldwide between January 2022 and October 2024.

The US tops the list, with American founders behind 43% of all fraudulent projects. This has been attributed to numerous crypto projects launched in the US, as well as high-profile booms such as the collapse of FTX in 2022.

China and the United Kingdom follow with 8% and 7% of fraudulent projects respectively.

The USA tops the list of failed projects, accounting for 33% of the total, followed by China with 7.63%, the UK with 7.22%, and South Korea and Singapore with over 6% each.

“Fraud and failed projects are more common in countries with strong market growth,” the report stated.

To determine the countries with the highest rate of fraudulent crypto projects, researchers compared the number of fraudulent projects launched by developers in each country to the total number of crypto projects.

Russia ranked highest, with analysts concluding that 24% of projects launched by Russian developers were scams. Swiss developers rank second in project fraud with 22%, followed by Chinese developers with 20%. Vietnam also ranked among the top ten, with 12% of crypto projects flagged as fraud.

Meanwhile, South Korea has the highest rate of failed crypto projects, with 59% of the total number of projects classified as dead, although the overall number is less compared to countries like the United States.

More than half of projects in the UK failed, while Singapore followed closely behind with 54%. While Canada and the Netherlands recorded a failure rate of 50%, Vietnam ranked sixth globally, with 42% of all projects launched in the country ending in failure.

The research highlighted the need for global standards and tighter regulations to eliminate the prevalence of scams and failed projects.

Regulators around the world have begun to tighten their control over the crypto industry in an effort to ensure economic stability and promote investor protection. For example, the Financial Conduct Authority in the United Kingdom plans to finalize crypto regulations by 2026, while Singapore and South Korea have implemented strict consumer protection measures.

The latest findings align with AlphaQuest’s February report; This report reveals that more than 70% of crypto projects launched during the 2020-2021 bull run were reported dead by early 2024, and 30% closed shortly after FTX filed for bankruptcy.

2023 has been cited as the most challenging year for the crypto industry in the 2020-2023 cycle; During this time, almost 60% of dead projects disappeared, mainly due to low liquidity and trading volume.