Crypto Scammers On The Decline
According to a mid-year crime update from Chainalysis, crypto inflows to known criminal addresses have decreased by 65% in 2023 compared to the same period last year. This is good news for the crypto industry as it shows a decline in illicit activities. However, one form of blockchain-based crime, ransomware, is on the rise.
Key Points:
– Scams, which are the highest revenue form of crypto-based crime, have fallen by 77% compared to the period through June 2022.
– The decline in scam revenue is mainly due to one of the largest scams, VidiLook, disappearing from the picture.
– Crypto transfers to risky entities, including mixers and high-risk exchanges, have fallen by 42% this year.
– Legitimate crypto volume has only fallen by 28%, with nearly $3 trillion in inflows this year.
– Ransomware crime has increased, with extortionists taking $449.1 million from their victims from January through June.
Why Is Ransomware So Popular With Crypto?
Unlike scams, which have seen a decline, ransomware crime is back in full swing. Chainalysis believes that criminals are increasing the size of ransom demands to maximize their profits. Bitcoin is often used for ransom payments because it is cross-border, liquid, and instantaneous. However, the traceability of Bitcoin payments can work against the criminals.
According to Chainalysis Cybercrime Research Lead Eric Jardin, transactions related to scams are closely related to Bitcoin’s market cycles, while transactions connected to ransomware and darknet markets are agnostic to Bitcoin’s price action.
Hot Take
While it is encouraging to see a decline in crypto scams and transfers to risky entities, the rise of ransomware is concerning. It highlights the need for improved security practices and measures to combat this form of criminal activity in the crypto space. Efforts should be made to educate users about the risks of ransomware and to ensure that they have proper safeguards in place to protect their digital assets.
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