When it comes to crypto crime, a new report issued by blockchain analysis firm Chainalysis shows that there’s good news and bad news. The good news is that such crime is down across the board. About 65 percent down, to be exact. The bad news is that much of the crime in the crypto arena has shifted to ransomware.
Chainalysis Report Shows Ransomware Growing
2022 was arguably the worst year on record for crypto. It brought about one of the worst bear markets in history, and the price of bitcoin, for example, fell from its $68,000 high to about $16,600 by the time year was over. In addition, several other assets followed in BTC’s footsteps, thus causing the crypto arena to lose more than $2 trillion in overall valuation. It was a sad and ugly sight to see.
Chainalysis, in its report, suggests that the bear market could largely be the reason behind declining crime. It’s likely many cyberthieves out there don’t see crypto as a valid space anymore, and thus they’d rather focus their time, energy, and efforts on different items or arenas that they now deem more profitable. That’s the good news.
However, this doesn’t mean there aren’t any illicit actors still out there. There are, and they’ve since shifted to ransomware tactics to get their hands on funds they don’t deserve or that they haven’t earned. The Chainalysis report explains:
This decrease in inflows to illicit addresses shows that the efforts of both the private and public sectors are paying off. Law enforcement pressure appears to be dampening criminal activity, while crypto businesses are doing their part in protecting users. However, the persistent scourge of ransomware demonstrates the need to remain vigilant.
The document shows that cases of crypto fraud fell by about $3.3 billion during the first half of 2023. This is a massive decline of about three quarters from where such crime stood during the same window in 2022. The issue remains, however, that ransomware saw an increase in activity of about $176 million. Chainalysis shows it as the only “crime division” that’s gained momentum since the start of the year.
How Does It Work?
Ransomware is basically a form of digital or computerized extortion. A hacker gains control of a computer or digital network and encrypts the data so the original owner(s) can’t gain access. From there, they’re forced to either live without the data for good or pay a ransom – usually in bitcoin or another form of crypto – to the attackers so they can retrieve the data and continue forward.
During the first half of 2023, the report shows that nearly $500 million in crypto was extorted through ransomware tactics from companies around the world. This puts 2023 as the second-largest year on record for ransomware.
