Cryptocurrency prices have gradually risen this year, recovering
after a string of bankruptcies at high-profile crypto firms in
2022 pushed down token prices and left investors with large
losses.
Crypto inflows to illicit services identified by Chainalysis -
which include darknet markets, ransomware actors, malware,
scams, fraud shops and child abuse material - hit $2.8 billion
in the first six months of 2023, down 65% from $8 billion in the
same period last year, Chainalysis said.
But these figures do not include flows to entities which are
subject to global sanctions. Transactions associated with
sanctioned entities accounted for 44% of 2022's record-high
$20.1 billion worth of crypto crime, Chainalysis said in
January.
Revenue from scams also declined, which Chainalysis said went
against the long-standing trend of people being more susceptible
to scams in times of rising prices, due to "market exuberance"
and "FOMO" (fear of missing out). But there was a rise in the
number of people falling for impersonation scams, in which
fraudsters pretend to be a law enforcement officer or other
authority figure to extort money, Chainalysis said.
Crypto payments to ransomware attackers hit $449.1 million in
the first half of 2023, up $175.8 million from the same period
last year, Chainalysis said. If this continues, ransomware
attackers will have their second best year on record, the
analysts added.
"Big game hunting - that is, the targeting of large,
deep-pocketed organizations by ransomware attackers - seems to
have bounced back after a lull in 2022. At the same time, the
number of successful small attacks has also grown," Chainalysis
said.
Chainalysis's figures probably under-represent crypto's role in
all crime. For example, they exclude when cryptocurrencies are
the proceeds of non-crypto-related crimes, such as when
cryptocurrency is used for payment in drug trafficking.
(Reporting by Elizabeth Howcroft; Editing by Sinead Cruise and
Mark Potter)
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