The digital assets ecosystem is witnessing a significant shift as new research from blockchain data company Chainalysis reveals a 19.6% year-to-date (YTD) decline in illicit crypto activity. This drop, from $20.9 billion to $16.7 billion, coincides with the rise of legitimate crypto transactions, now at their highest levels since 2021. These findings suggest a growing maturity in the crypto space, bolstered by regulatory advancements such as the SEC’s approval of Spot Bitcoin ETFs and the Central Bank of the UAE’s stablecoin regulations.
Eric Jardine, Cybercrime Research Lead at Chainalysis, noted, “It is highly encouraging to see that criminal activity continues to become an ever-shrinking share of the crypto ecosystem. The growth of legitimate activity outpacing that of illicit activity on-chain demonstrates the continued transition of cryptocurrencies to the mainstream.” While the reduction in illicit activity is promising, Jardine emphasized that completely eradicating criminal behavior in any financial system is unlikely. However, the adoption of advanced blockchain analysis tools is empowering law enforcement and enterprises to counter these threats more effectively.
Ransomware on the Rise
Despite the overall decline in crypto-related crime, ransomware remains a growing concern. Through the end of June 2024, ransomware payments reached $459.8 million, surpassing the $449.1 million recorded in the same period last year. This puts 2024 on track to be the worst year on record for ransomware attacks. A particularly alarming trend is the rise in the maximum ransom payment, with 2024 witnessing a single payment of approximately $75 million to the ransomware group known as Dark Angels. This represents a 96% year-on-year growth from 2023 and a staggering 335% increase from 2022.
Bitcoin: The Preferred Target for Crypto Criminals
Hacking activity has also seen a resurgence in 2024, with the cumulative value of stolen crypto reaching $1.58 billion, an 84.4% increase compared to the same period in 2023. Notably, Bitcoin has re-emerged as a favored target for hackers, accounting for 40% of the transaction volume associated with stolen funds. This shift suggests that attackers are increasingly focusing on centralised exchanges, using sophisticated social engineering tactics, including applying for IT jobs, to infiltrate these platforms.
Jardine highlighted the divergence of ransomware and hacking from the overall decline in illicit on-chain activities, stating, “These two types of crime are often perpetrated by organised groups that leverage sophisticated cyber infrastructure. The key to disrupting cybercrime is disrupting its supply chains, including attackers, affiliates, partners, infrastructure services providers, launderers, and cashout points. Because the operations for crypto heists and ransomware operate almost entirely on the blockchain, law enforcement armed with the right solutions can follow the money to better understand and disrupt these actors’ operations.”
As the crypto ecosystem continues to evolve, these findings underscore the importance of robust security measures and regulatory oversight in safeguarding the future of digital assets.
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