Crypto Crime Declines In 2023 But Ransomware Still Casts Its Shadow

As revenues from crypto crime plummet, the menacing rise of ransomware attacks and "big game hunting" still casts a shadow.

Crypto Crime Declines In 2023

Chainalysis's "Crypto Crime Mid-Year Update" report provides a mixed picture, with overall offences falling sharply but a worrying trend of ransomware attacks.

Overall, in the period from January to June 2023, crypto funds acquired by criminal means dropped a remarkable 65%, compared to the same period in 2022.

Charts of cumulative inflows to legitimate, risky, and illicit services.
Cumulative inflows to legitimate, risky, and illicit services by year (Chart: Chainalysis)

Interestingly, the decline has been driven by a fall in crypto scams. The Chainalysis blog highlights a $3.3 billion drop in stolen funds compared with 2022, despite the significant rise in crypto valuations.

Specifically, two high-profile scams, VidiLook and Chia Tai Tianqing Pharmaceutical Financial Management, abruptly disappeared from the space—dramatically reducing total crypto scam revenues.

Chart of total weekly scam inflows.
Total weekly scam inflows to top 10 scams (Chart: Chainalysis)

Ransomware Remains A Threat

In contrast, crypto-powered ransomware is only growing as a problem. Illegal revenues are expected to reach all-time highs in 2023, with criminals already taking $176 million more than in 2022. The report attributes this increase to the resurgence of “big game hunting,” where criminals specifically target large corporations.

Rather than accept the disruption to their operations and admit that they (and their users) have been the victims of a security breach, large companies are more likely simply to pay the criminals quietly and return to business as normal. In 2020, US travel services company CWT Global paid $4.5 million in bitcoin after 30,000 of its computers were compromised. There have been rumors of far larger payments, with CNA Financial said to have paid an incredible $40 million in 2021, though this has not officially been confirmed.

Despite the contrasting trends in crypto-related crimes, the report emphasizes the considerable progress made in thwarting crypto fraud and theft, thanks largely to regulatory pressure and enhanced security measures put in place by crypto enterprises.

Read: Seven Crypto Hacks And Scams, And How To Protect Yourself.

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