A total of transfers for cyber crimes with cryptocurrencies of USD 10 billion during the year 2020, was reported by the intelligence firm Chainalysis in its 2021 Crypto Crime Report, published this Monday, January 19.
Cyber crimes carried out through cryptocurrencies decreased by 53.3% compared to 2019, with a total of transfers of USD 21.4 billion.
Chainalysis highlights that despite the economic downturn caused by the Covid-19 pandemic, bitcoin broke all of its previous price records, greatly increasing crypto transaction volumes.
In 2019, criminal activity accounted for 2.1% of all cryptocurrency transaction volume, or roughly $ 21.4 billion in transfers. In 2020, the criminal share of all cryptocurrency activity fell to just 0.34%, or $ 10.0 billion in transaction volume. One reason the percentage of criminal activity dropped is that overall economic activity nearly tripled between 2019 and 2020.
Chainalysis, Crypto Crime Report 2021.
The following image reflects the value of the annual totals of cryptocurrencies paid to cybercriminals from 2017 to 2020.
The totals of the annual value paid in cryptocurrencies. Source: Chainalysis.
The report highlights that crimes related to cryptocurrencies decreased, in terms of money paid, and that the percentage “still remains a small part of the general economy of cryptocurrencies.” Subsequently, the types of crimes that drove that 0.34% are detailed in the report of cryptocurrency transactions associated with criminal activity in 2020.
Scams, dark web and ransomware
Chainalysis analyzed the types of crimes received by the highest amount of cryptocurrencies in total from 2017 to 2020. The firm clarifies that it is the value of the cryptocurrencies received by criminals, which are associated with “criminal income.” This implies that the annual total is less than that shown in the first graph, which also includes transfers made by illegitimate entities, according to Chainalysis, and that it is associated with money laundering.
Funds received by illicit entities from 2017 to 2020. Source: Chainalysis.
As seen in the graph above, scams (in blue) constitute the predominant crime for the four years shown, followed by activities on the darknet.
Chainalysis highlights that, despite having a minority share in the 2020 annual general total, ransomware was the crime that grew the most in percentage terms that year. Once this type of encryption attack has been carried out on the user’s information, cryptocurrencies are requested in exchange for the keys to restore the encrypted data.
The following graph shows the monthly amount received by the different types of criminal entities throughout the year 2020.
Monthly payments received by illicit entities in 2020. Source: Chainalysis.
In 2019, scams accounted for 54% of cryptocurrency-related crime, representing roughly $ 2.6 billion in received crypto, says Chainalysis. “However, both the gross value and share of all criminal activity represented by scams is much lower in 2020 than in 2019, as there were no scams comparable to the huge Ponzi PlusToken scheme last year, which raised more than $ 2 billion ».
Darknet markets were once again the second category of crime, accounting for $ 1.7 billion in cryptocurrency activity, compared to $ 1.3 billion in 2019.
However, the big growth in cryptocurrency-based crime in 2020 came from ransomware, Chainalysis noted. Although this category of crimes is represented only 7% of all funds received by illicit entities, or a value of just under USD 350 million in cryptocurrencies. But that figure represents an increase of 311% compared to 2019.Chainalysis notes. No other category of cryptocurrency-based crime increased so dramatically in 2020. It is possible that telecommuting measures driven by Covid opened up new vulnerabilities for many organizations.
It should also be considered, points out the intelligence firm, that the ransomware estimates are probably lower than those reported. “The 2020 figure for total ransomware payments is likely to grow as we identify more addresses associated with different strains, particularly in the later months of the year.”
CryptoNews reported on January 10 that Binance and Huobi are the exchanges of choice for laundering the bitcoin funds of the Ryuk ransomware, according to a report published jointly by the firms Advanced Intelligence and Hyas. The researchers were able to identify the pattern of fund movements in the aforementioned cryptocurrency trading platforms.