- Chainalysis reports drop in crypto scam revenue in 2020.
- Increase in ransomware attacks due to new strains.
Recent reports from Chainaysis, a leading blockchain analytic firm has revealed that revenue gotten from crypto scams last year dropped by $5 billion compared to 2019. The analytics firm reports that transactions involving illicit funds decreased more rapidly than the total volume of funds, falling from 2.1 percent of all transactions analyzed in 2019 down to just 0.34 percent in 2020.
The dollar amount of crypto taken by scams decreased the most according to Chainalysis. It dropped by 71 percent because of the 2019 multi-billion dollar Pulse Token scandal which awakened consciousness to crypto scams in 2020. Chainalysis in their report noted that apart from crypto scam revenue, crypto crime volume and launder attempts also reduced from above $20B in 2019.
Amidst crypto crime drop, other disturbing news
Despite the fall in crypto scam revenue, Chainalysis notes that there was a rise in ransomware-related theft going up by 311 percent between 2019 and 2020. It represents an additional loss of over $250 million in 2020 compared to 2019.
The rise in ransomware is due to the introduction of “new strains taking in large sums from victims.” The new strain and existing ones accounted for around $350 million of cryptocurrency theft in 2020.
The analytics firm notes, however, that despite a year-on-year rise in ransomware and darknet market activity, the outlook regarding crypto crime has been better. They say this is because of the advancement in regulatory and compliance processes.
Regarding compliance, Chainalysis said the increasing collection of personal identifying information from exchanges has effectively forced criminals to “rely on a small group of service providers” to exchange ill-gotten crypto holdings into fiat.
“In the long run, (compliance) efforts by exchanges will also remove some of the incentive to use cryptocurrency in criminal activity, as it will become much harder for cyber criminals to convert cryptocurrency into cash if they can’t use exchanges, Chainalysis noted.
In January, the Department of Justice announced that it had confiscated $454,000 in cryptocurrency from a ransomware operator. This bust was performed in a combined operation with Chainalysis.