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Illicit Crypto Activity Down 20%, but Stolen Funds Surge

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by Giorgi Kostiuk

2 years ago


  1. Mid-Year Key Observations
  2. Hacker and Ransomware Activity Increase
  3. Role of Centralized Exchanges in Money Laundering

  4. Analysts at Chainalysis report that illicit blockchain activity has dropped nearly 20% year-to-date, despite rising volumes of stolen funds and ransomware inflows.

    Mid-Year Key Observations

    According to a mid-year report from blockchain analytics firm Chainalysis, illicit crypto activity has declined nearly 20% year-to-date. This indicates a growing legitimacy of the sector. Despite an overall decrease, there are still concerning trends in specific types of cybercrime. Funds stolen in crypto heists nearly doubled to $1.58 billion, and ransomware inflows rose by 2% to $459.8 million in the first half of 2024.

    Hacker and Ransomware Activity Increase

    Chainalysis attributes the surge in stolen funds to a resurgence in attacks on centralized exchanges, pausing a trend where hackers had focused on decentralized finance. While the overall number of hacking incidents has only marginally outpaced that of 2023, the average value stolen per event has surged by nearly 80% in 2024.

    >CITE_W_A: “The average amount of value compromised per event has increased by 79.46%, rising from $5.9M per event from January to July of 2023 to $10.6M per event thus far in 2024, based on the value of the assets at the time of theft.”

    Chainalysis notes continued ransomware activity, posing a persistent threat. In 2024, the largest-ever ransomware payment was recorded, amounting to approximately $75 million to the Dark Angels ransomware group. Ransom payments this year could surpass last year's record of $1 billion.

    Role of Centralized Exchanges in Money Laundering

    Centralized crypto exchanges are frequently targeted by hackers and play a significant role in laundering stolen assets. Chainalysis previously found that trading platforms have received nearly $100 billion worth of crypto from known illicit addresses since 2019, pointing to a troubling lack of international cooperation on anti-money laundering efforts. Nearly 30% of all crypto from illicit addresses ends up at sanctioned services, including the Russian exchange Garantex. The peak was in 2022, when $30 billion of 'dirty crypto' interacted with such services, underscoring persistent challenges in combating crypto-based money laundering.

    While the overall decline in illicit activity is encouraging, the continued rise in stolen funds and ransomware payments underscores the evolving tactics of cybercriminals.

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