On Aug. 15, crypto compliance and research firm Chainalysis released the first part of its 2024 crypto crime report, revealing an overall decline in illicit on-chain activity.

Overall Decline in Illicit Activity

The firm revealed that aggregate illicit activity on-chain has dropped by 19.6% year-to-date, down from $20.9 billion to $16.7 billion. This demonstrates that legitimate activity is growing more quickly than illicit activity.

Increase in Theft and Extortion

However, despite this decline in illicit transactions, two categories — stolen funds and ransomware — are on the rise. Stolen funds have nearly doubled from $857 million to $1.58 billion, while ransomware inflows have increased by about 2%, reaching $459.8 million, which is 84% higher than the amount stolen over the first half of 2023. The research revealed that the average amount stolen per heist increased by almost 80%, and hackers are targeting centralized exchanges more frequently rather than prioritizing DeFi protocols.

Research Details and Conclusions

Additionally, this year is on track to be the highest-grossing year for ransomware payments. The median ransom payment for severe strains of malware has increased from $200,000 in early 2023 to $1.5 million in mid-June 2024. Despite more frequent attacks, victims are paying ransoms less often. Chainalysis also reported that inflows to 'risky services' such as mixers and exchanges without KYC procedures are trending higher than they were at this point last year.

Researchers concluded that the key to disrupting cybercrime is 'disrupting its supply chains, including attackers, affiliates, partners, infrastructure services providers, launderers, and cashout points.' The firm also posted survey results revealing a critical need for more staffing resources for crypto investigations.