According to Cybercrime Research Lead Eric Jardin, ransomware assaults are “agnostic to Bitcoin price actions,” in contrast to frauds.
According to a mid-year crime analysis from Chainalysis, cryptocurrency inflows to known criminal addresses are down 65% in 2023 compared to the same period one year earlier.
Ransomware is one type of blockchain-based crime that has remained tenacious and is growing, though.
Cryptocurrency scammers are fewer now
Scams, the “highest revenue form of crypto-based crime,” have gone off a cliff, down 77% from the period to June 2022, according to a blog post published on Wednesday by Chainalysis.
Even while 2022 scam revenue decreased from 2021, the reduction this year is “more notable,” according to the company, because it happened when cryptocurrency prices, particularly Bitcoin, were rising.
According to the blog article, “normally, positive price movements translate to higher scam revenue, probably because increased market euphoria and FOMO make victims more receptive to scammers’ pitches.” But the sharp fall in scams in 2023 breaks the long-standing pattern.
According to Chainalysis, the disappearance of VidiLook, one of the biggest scams, has had a significant impact on the drop in scam earnings. Since the exit fraud was finished in mid-April, the investment scam that “bilked” victims out of $120 million in a few of months has not been followed by any new scams.
In general, this year saw a 42% decline in crypto transfers to “risky” entities, namely mixers and high-risk exchanges, compared to a 28% decline in “legitimate” crypto traffic. At almost $3 trillion this year, legitimate transfers made up the great bulk of inflows, while risky and criminal transfers accounted for $75 billion and $2.5 billion, respectively.
Why Is Crypto Ransomware So Popular?
Ransomware crime, in contrast to frauds, seems to be picking up steam again after briefly dropping in 2022. Extortionists have stolen $449.1 million from their victims between January and June.
Last year, Chainlysis proposed a theory for why ransomware gang payments were becoming less frequent: improved security procedures from large-scale organizations and penalties for cashout providers. The business now thinks that criminals are making up for this by raising their ransom demands in an effort to extract as much money as possible from the victims they are able to capture.
Because it is “cross-border, liquid, and instantaneous,” according to Chainalysis Cybercrime Research Lead Eric Jardin, Bitcoin is frequently utilized for ransom payments. He did point out that the payments’ capacity to be tracked can frequently work against any crooks trying to utilize it.
According to the study, transactions associated to scams are “very closely related with Bitcoin’s market cycles,” whereas those connected to malware and darknet markets are “agnostic to Bitcoin’s price action.”
“In both cases, prices for drugs or decryption keys, respectively, are denominated in USD and payments can be made in whatever number of satoshis fits the bill,” the man explained.
