Cryptocurrency Crime Trends in 2023: Midyear Update
Chainalysis, a blockchain analysis firm, has released its Crypto Crime Midyear Update for the first half of 2023.
The report highlights significant changes in cryptocurrency-related criminal activities, with a notable decline in illicit transactions and crypto scams, but an alarming increase in ransomware attacks. In this article, we will explore the key findings and trends identified by Chainalysis.
1/ Our Crypto Crime Mid-year Update is out! Here’s what we found:
📉Crime overall is down 65%
💸Scammers took $3.3B less YoY so far in 2023
📈Ransomware is on pace for its’ 2nd-biggest year ever
🧵Follow along for more on these👆key takeaways.https://t.co/Dvi8G6BcUB
— Chainalysis (@chainalysis) July 12, 2023
Decrease in Illicit Cryptocurrency Flows
According to Chainalysis, known criminal entities received 65% less cryptocurrency in the first half of 2023 compared to the same period in 2022. Transactions to risky entities such as crypto mixers and high-risk exchanges also decreased by 42% year-on-year (YoY). However, legitimate services experienced a smaller decline of only 28% in transaction volumes.
Decline in Crypto Scams
The report attributes a significant portion of the overall decline in criminal activity to a decrease in cryptocurrency-based scams. In the first half of 2023, crypto scammers made approximately $3.3 billion less compared to the previous year, accumulating just over $1 billion. This decline can be attributed to the disappearance of two prominent scams: VidiLook and Chia Tai Tianqing Pharmaceutical Financial Management.
Alarming Rise in Ransomware Attacks
Unfortunately, ransomware attacks are on track to have one of their most lucrative years to date. In the first half of 2023, ransomware attackers extorted $176 million more than the same period in 2022. If this trend continues, ransomware attackers are projected to extort $899 million from victims by the end of 2023, trailing only 2021’s record of $940 million.
Factors Contributing to Rising Ransomware Profits
The report warns that the increase in ransomware profits can be attributed to a resurgence in big-game hunting and a rise in successful smaller attacks. These factors, coupled with the vulnerability of victims, have led to a significant growth in ransomware-related revenue.
Positive Developments and Future Challenges
While the decline in crypto scams and illicit flows is a positive development, the report highlights the need for continued vigilance. The rise in funds flowing to impersonation scams and the persistence of ransomware attacks present ongoing challenges. The maturation of cybersecurity services in decentralized finance and the adoption of AI-based solutions are contributing to the reduction of criminal activities. Additionally, the growing emphasis on digital asset custody and the demand for secure storage from traditional institutions are further strengthening cybersecurity measures.
Chainalysis’s Crypto Crime Midyear Update for 2023 reveals a decline in illicit cryptocurrency flows and crypto scams, while highlighting the alarming rise in ransomware attacks. The report emphasizes the importance of maintaining robust cybersecurity measures and staying vigilant to combat evolving threats in the cryptocurrency space.