Despite an unprecedented surge in ransomware activity, a Chainalysis study found that crypto-related crime will drop significantly in 2023 compared to the previous two years.
Data from a blockchain research firm shows that cryptocurrency inflows to illegal services fell 65% on an annual basis, while cryptocurrency inflows to risky services such as mixers and high-risk cryptocurrency exchanges decreased 42% year-on-year. .
This data does not include companies under sanctions or subject to special measures.
Meanwhile, inflows to formal services fell only 28% year-on-year, which Chainalysis said means that beyond market shortcomings, illicit trade is declining at a much faster pace.
ransomware
The data shows fraud inflows are declining in all categories of cryptocrime except ransomware, which is already below the 2021 bull market numbers.
At the current pace of attacks, ransomware attackers are expected to steal approximately $898.6 million by the end of 2023. By comparison, the cryptocurrency industry will lose a total of $939.9 million to ransomware attacks in 2021, and he will lose less than $500 million in 2022.
The company believes the main cause of this increase is what it calls “big game hunting.” The term is used to refer to ransomware attacks against large, heavily funded corporations.
In addition, the number of smaller attacks has also increased, and they have become more successful.
Chainalysis suggests that the 2022 Russia-Ukraine war likely contributed to the decline in ransomware, as it forced many of the organizations carrying out ransomware attacks out of the region.
This year’s ransomware incidents are at an all-time high and are getting more sophisticated.
scam
On the other hand, fraud-related inflows fell “significantly” in 2023.
Revenues from cryptocurrency fraud are down 77% compared to 2022, and 2022 itself will see a significant drop on an annual basis.
Fraud revenue decreased despite positive price momentum in the market. This has historically caused a surge in revenue as people are more susceptible during FOMO and “market frenzy”.
According to Chainalysis, the decline is largely driven by the demise of two high-profile investment scams: VidiLook and Chia Tai Tianqing Pharmaceutical Financial Management.
Both seem to have deceived the user’s total deposit by “departure fraud”.
The company said such scams are typically quickly replaced, but that has not been the case so far due to heightened vigilance in the industry and law enforcement.
However, the data shows that identity theft scams are up 49% year-on-year, suggesting that people falling victim to these types of scams are becoming more vulnerable.
