A ransomware report by Chainanalysis, the crypto market intelligence firm, shows that funds flowing into crypto crime related protocols have witnessed a drop since July last year as compared to the previous year. This has happened despite a rise in crypto prices.
However, there has been a high increase in ransomware attacks with estimates of $175 Million more being paid by the victims.
Rising Markets Doesn’t Witness Higher Crypto Crime This Year
It is a correlation that whenever markets rise, there has been an increase in illicit income via cybercrimes. However, that trend has broken this year.
After a market pullback saw the value of Bitcoin almost double, yet there has been a 65% fall in funds that goes into legitimate, risky and illegal services for 2023 than 2022.
Have a look at the below comparison chart from Chainanalysis.
We can clearly observe that the highest growth in cumulative flows were seen during 2021 which was also a super bullish year for crypto markets.
However, that trends seems to have broken with the year of 2023 (yellow line) which despite being a bullish year till now saw a dip in cash flowing into crypto crime.
One may argue that transaction volumes are also down. Bitcoin witnesses reduced transactions than the same time of the year in 2021.
However, there has been a greater reduction in transactions(42%) flowing into illegal protocols as compared to overall transactions(28%).
What Crypto Crimes Are Falling
The data from Chainanalysis also shows details about specific crypto crimes that have fallen since the last year.
The data clearly shows that the following crypto related crimes have fallen.
- Darknet Markets
- Child Abuse
- Fraud Shops
- Cybercriminal Administrator
Scams have witnessed the highest fall among all sectors possibly because people want to preserve each dollar of their capital after losing so much to the markets. People have lost $3.3 billion lesser in the last one year than what they did in the previous year.
The second greatest reduction in criminal fund flows can be witnessed in hacks. Earlier we had witnessed several hacks stealing funds from cryptocurrency smart contracts, NFT collections, defi protocols and other areas.
One of the largest ever hacks also took place in 2022 when the Lazarus Group of North Korea hacked and stole funds from Axie Infinity.
There is also significant reduction in cybercriminal administrator. These are the criminals which aid other cybercriminals and coordinate with them to execute crimes.
Ransomware Gains More Ground
Despite all these reduction in funds flowing to crypto crime related activities, there has been an increase in ransomware attacks. People have lost $175 million more to ransomware attacks in July 2022 – July 2023 than the previous one year.
Ransomware are the crypto crimes where attacker deny your access to your own data or protocol. They ask you money to provide you access to your own portals which can be called a ransom.
WannaCry is a known ransomware that has caused nearly $4 billion loss as per Kaspersky in over 150 countries.
However, 2022 was also a year which witnessed a gigantic fall in ransomware attacks. In 2022, ransomware attackers were only able to extort $456.8 million as compared to $765.6 million the year before. An increase of 175 million in 2023 is smaller than early figures.
Here is a graphical representation of losses due to ransomware since 2017 to 2022.
This year (July 2022 – July 2023) we saw a great fall in crypto crimes with a net fall of $5.2 billion. This means $5.2 billion less money went into the hands of criminals as compared to July 2021 – July 2022. Yet there was a mild rise in ransomware attacks which we hope will surely be addressed in the coming time.
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