Chainalysis the blockchain analalytics firm has revealed the surge of crypto ransom attacks in the first half of 2023. Learn about the trends and risks involved. Stay informed.
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In a recent new report by Chainalysis , blockchain analytics firm Chainalysis revealed that crypto crime has experienced an overall decline in the first six months of 2023.
However, the volume of payments made to ransomware attackers has witnessed a significant surge, setting a course for its second-highest annual total on record.
Gradual Recovery of Cryptocurrency Prices
Following a series of high-profile crypto firm bankruptcies in 2022, which led to plummeting token prices and substantial investor losses, cryptocurrency prices have been gradually on the rise throughout this year.
Decrease in Crypto Inflows to Illicit Services
Chainalysis identified inflows of cryptocurrencies to illicit services, including darknet markets, ransomware actors, malware, scams, fraud shops, and child abuse material.
These inflows amounted to $2.8 billion in the first half of 2023, representing a 65% decrease compared to the $8 billion reported in the same period last year.
Exclusion of Sanctioned Entities from Crime Statistics
It is worth noting that the figures provided by Chainalysis do not encompass flows to entities subject to global sanctions.
Transactions associated with sanctioned entities made up 44% of the record-high $20.1 billion worth of crypto crime in 2022, as stated by Chainalysis in January.
Decline in Revenue from Scams
Contrary to the long-standing trend of people being more susceptible to scams during periods of rising prices, Chainalysis reported a decline in revenue from scams. This unexpected decrease in scam revenue goes against the notion of “market exuberance” and “FOMO” (fear of missing out).
However, there has been an increase in the number of individuals falling victim to impersonation scams. These scams involve fraudsters posing as law enforcement officers or other authority figures to extort money from their victims.
Soaring Crypto Payments to Ransomware Attackers
In the first half of 2023, the amount of crypto payments made to ransomware attackers reached a staggering $449.1 million.
This marks an increase of $175.8 million compared to the same period last year. Should this upward trend continue, ransomware attackers will be on track for their second most successful year to date, according to Chainalysis analysts.
Rise in “Big Game Hunting” and Small Attacks
Chainalysis highlighted the resurgence of “big game hunting” by ransomware attackers, which refers to targeting large, deep-pocketed organizations. This trend has seen a revival following a lull in 2022.
Simultaneously, there has also been a growth in successful small-scale attacks.
Underrepresentation of Crypto’s Role in Crime
Chainalysis acknowledges that its figures likely underestimate the involvement of cryptocurrencies in overall criminal activities.
For instance, the statistics exclude cases where cryptocurrencies are the proceeds of non-crypto-related crimes, such as instances where cryptocurrency is used as a payment method in drug trafficking.
Conclusion Crypto Ransom
The first half of 2023 has witnessed a surge in crypto ransom attacks, despite an overall decline in crypto crime. Payments to ransomware attackers have reached unprecedented levels, indicating a potential second-most successful year on record for these attackers.
Furthermore, the decrease in revenue from scams defies expectations during a period of rising cryptocurrency prices.
As the cryptocurrency landscape evolves, it is essential for individuals and organizations to remain vigilant against these evolving threats to maintain the integrity and security of their digital assets.
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Crypto Ransom
FAQ Crypto Ransom
Why have crypto ransom attacks increased in the first half of 2023?
The rise in crypto ransom attacks can be attributed to the resurgence of “big game hunting” by ransomware attackers, as well as the growth of successful small-scale attacks.
What are impersonation scams in the context of crypto crime?
Impersonation scams involve fraudsters posing as law enforcement officers or other authority figures to extort money from unsuspecting victims.
Has the revenue from scams decreased despite rising cryptocurrency prices?
A: Yes, contrary to expectations, revenue from scams has declined, going against the usual trend observed during periods of rising prices.
How much money was paid to ransomware attackers in the first half of 2023?
Ransomware attackers received a total of $449.1 million in crypto payments during the first half of 2023.
Are crypto crime statistics inclusive of flows to entities subject to global sanctions?
No, the figures provided by Chainalysis do not include transactions associated with sanctioned entities
Does Chainalysis account for all instances of crypto involvement in crime?
Chainalysis acknowledges that its statistics likely under-represent the role of cryptocurrencies in criminal activities, as they exclude non-crypto-related crimes where cryptocurrency is used as proceeds, such as drug trafficking.
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