According to a recent crypto crime report by blockchain data firm Chainalysis, cryptocurrency-related crimes have decreased by 65% in the first half of 2023 compared to the same period in 2022. The decline is primarily attributed to a significant reduction in crypto scams and dark web market activities.
The report reveals that crypto criminals have generated approximately $3.3 billion less in revenue in 2023, with a total of just over $1.0 billion for the year. In June 2022 alone, crypto scammers made 77% more revenue than in June 2023.
Interestingly, the decrease in crypto crimes occurred despite positive price movements in cryptocurrencies. Typically, rising prices lead to higher scam revenue, as market enthusiasm and fear of missing out (FOMO) make individuals more susceptible to scams. However, this year’s decline in scams breaks that trend.
Chainalysis also highlights a 42% drop in inflows to “risky entities” such as high-risk exchanges and mixers, which are commonly exploited by crypto hackers for money laundering purposes.
The report attributes the decline in revenue earned by crypto criminals to the absence of two major investment-type scams, VidiLook and Chia Tai Tianqing Pharmaceutical Financial Management, both of which appear to have executed exit scams.
However, the report highlights a concerning trend: ransomware attacks are surging in the crypto market. While other types of crypto crimes have declined, ransomware attacks have resulted in losses of at least $449 million through June 2023.
The decrease in ransomware attacks in 2022, attributed to the Russia-Ukraine war, is considered a contributing factor to the overall decline in crypto crimes. The displacement of organizations involved in such attacks due to the war played a role in this decrease.
The report predicts that if the current rate of ransomware attacks continues, these attackers could steal approximately $898.6 million by the end of this year. The surge in ransomware attacks is largely driven by the practice of “big game hunting,” targeting entities with substantial financial resources.
While overall crypto crime has declined significantly, the rise in ransomware attacks underscores the persistent challenges in the crypto market. Continued efforts are needed to mitigate the risks associated with these attacks and ensure the security of the crypto ecosystem.