Source: www.dreamstime.com
Cryptocurrency-based crimes increased in 2021, according to the Chainalysis Crypto Crime Report 2022. The report states that by the end of 2021, cybercriminals were responsible for $11 billion worth of fraud from illegal sources, compared to $3 billion the same time the previous year.
The report adds that stolen funds were worth $9.8 billion, which is 93% of the total criminal balances. This was followed by darknet market funds which were worth $448 million. Scams were worth $192 million, fraud shops $66 million, and ransomware $30 million. In the same year, criminal balances rose from a low of $6.6 billion in July to a high of $14.8 billion in October.
Source: blog.chainalysis.com
The report further revealed that the US Department of Justice (DOJ) seized cryptocurrency worth 2.3 million from DarkSide ransomware operators who were found responsible for the Colonial Pipeline attack in 2021. The Internal Revenue Service, Criminal Investigation (IRS-CI) seized cryptocurrency worth over $3.5 billion in 2021, while the London’s Metropolitan Service seized cryptocurrency of £180 from a suspected money launderer in the same year. In February this year, DOJ seized cryptocurrency worth $3.6 billion which was connected to the 2016 Bitfinex hack.
According to the report, the funds liquidating time for administrators, darknet market vendors, and illicit wallets reduced by 75% in 2021. Ransomware operators stored their funds for 65 days on average before liquidating.
The report showed that each cybercriminal held cryptocurrency worth one million dollars or more, and 10% of their funds in 2021 were received from illicit addresses. The report also revealed that 4,068 cybercriminals held more than $25 billion worth of cryptocurrency. The group represented 3.7% of all cryptocurrency-related criminals, or cryptocurrency worth $1 million in private wallets. 1,374 cybercriminals received between 10-25 percent of their funds from illicit addresses, while 1,361 cybercriminals received between 90-100 percent of their total balance from illicit addresses.
Cybercriminals have laundered cryptocurrency worth $33 billion since 2017, with most of it moving to centralized exchanges. Decentralized Finance (DeFi) protocols recorded the highest growth in usage for money laundering at 1,964%. DeFi systems offer financial instruments without the need for intermediaries.
Source: blog.chainalysis.com
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“In nearly all of these cases, developers have tricked investors into purchasing tokens associated with a DeFi project before draining the tools provided by those investors, sending the token’s value to zero in the process,” stated the report.
The report adds that crypto worth $2.3 billion was stolen from DeFi platforms, and the value stolen from DeFi platforms surged by 1,330%.
Source: blog.chainalysis.com
Chainalysis said that they managed to track the activities of 768 cybercriminals whose cryptocurrency wallets had enough activity to accurately estimate their location. According to the firm, much of the illegal activity happened in Russia, Saudi Arabia, South Africa, and Iran.
“Time zones of course only allow us to estimate longitudinal location, so it’s possible some of these criminal whales are based in other countries,” the firm stated in the report.
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