Cryptocurrency-related crime dropped significantly in 2023 compared to the previous two years, despite ransomware activity soaring to unprecedented levels, according to Chainalysis research.
Data from research firm Blockchain shows that cryptocurrency inflows to illicit services are down 65% annually, while inflows to risky services like high-risk cryptocurrency mixers and exchanges are down 42% year-over-year.
The data does not include entities that have been sanctioned or subject to special measures.
Meanwhile, entries into legitimate services are only down 28% year-over-year, meaning illicit transactions are falling at a significantly faster rate despite the downside of the market, according to Chainalysis.
According to the data, illicit entries are down across all categories of crypto crime except ransomware, which is already behind the numbers seen during the 2021 bull run.
Ransomware attackers are expected to steal approximately $898.6 million by the end of 2023 at the current rate of attacks. Comparatively, the crypto industry lost a total of $939.9 million in ransomware attacks in 2021 and less than $500 million in 2022.
The firm attributes the uptick primarily to what it calls “big game hunting,” a term used to refer to ransomware attacks against large entities with substantial financial resources.
Also, the number of smaller attacks has also increased and they tend to end successfully more often now.
Chainalysis suggests that the 2022 Russia-Ukraine war likely contributed to the decline in ransomware, as it displaced many of the organizations carrying out these attacks from the region.
Ransomware incidents are at a record level this year and have gotten more sophisticated.
On the other hand, scam-related entries have experienced a “drastic” drop during 2023.
Crypto scam revenue is down 77% compared to 2022, which itself saw a significant decline on an annual basis.
Scam revenue fell despite positive price momentum in the market, which has historically caused revenue to rise as people are more susceptible amid FOMO and “market exuberance.”
According to Chainalysis, the drop is largely due to the demise of two prominent investment-type scams: VidiLook and Chia Tai Tianqing Pharmaceutical Financial Management.
Both appear to have been “ripped off” and made off with the entirety of user deposits.
The firm said these scams are usually replaced immediately, but that hasn’t been the case until now as the industry and law enforcement become more vigilant.
However, the data indicates a 49% annual increase in phishing scams, suggesting a growing vulnerability among individuals to fall victim to phishing scams.
This post Cryptocrime is down 65% in 2023, though ransomware is still prevalent
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