12-7-2023 (LONDON) According to blockchain analytics firm Chainalysis, crypto crime has experienced a decrease in the first six months of 2023. However, the volume of payments made to ransomware attackers has surged, setting the stage for potentially the second-highest annual total on record.
Following a series of bankruptcies in high-profile crypto companies during 2022, token prices plummeted, leaving investors with substantial losses. Nonetheless, cryptocurrency prices have gradually recovered this year.
Chainalysis identified inflows of cryptocurrencies to illicit services, including darknet markets, ransomware actors, malware, scams, fraud shops, and child abuse material. In the first half of 2023, these inflows amounted to $2.8 billion, which marks a significant decline of 65% compared to $8 billion during the same period last year.
It’s worth noting that these figures do not account for flows to entities subject to global sanctions. In January, Chainalysis revealed that transactions associated with sanctioned entities contributed to 44% of the record-high $20.1 billion worth of crypto crime in 2022.
Chainalysis also reported a decrease in revenue from scams, defying the conventional trend of individuals falling victim to scams during times of rising prices. This trend is typically attributed to “market exuberance” and the “fear of missing out” (FOMO). However, the firm observed an increase in the number of people succumbing to impersonation scams, where fraudsters pose as law enforcement officers or other authority figures to extort money.
The analysts at Chainalysis disclosed that crypto payments to ransomware attackers reached $449.1 million in the first half of 2023, which represents a surge of $175.8 million compared to the same period last year. If this trajectory continues, ransomware attackers are poised to experience their second most successful year ever.
“Big game hunting,” the practice of targeting large, deep-pocketed organizations, appears to have resurged among ransomware attackers after a lull in 2022. Simultaneously, the number of successful smaller attacks has also risen, as noted by Chainalysis.
It is important to acknowledge that Chainalysis’s figures may not fully reflect crypto’s involvement in all forms of crime. For instance, the data excludes instances where cryptocurrencies are used as proceeds from non-crypto-related criminal activities, such as drug trafficking.
