Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
Crypto Crime Falls But Ransomware Persists: 2023 Mid-Year Update
Research | July 13, 2023
Image: Chainanalysis
2023 Mid-Year Crypto Crime Update from Chainalysis
Despite a broad downturn in crypto crime in 2023, ransomware has bucked the trend, extorting an alarming $175.8 million more than the same period in 2022.
- Cryptocurrency-related crime has significantly decreased in 2023, with inflows to known illicit entities down by 65% compared to the same period in 2022. Inflows to risky entities, primarily mixers and high-risk exchanges, are also down by 42%. This decline is more pronounced than the 28% drop in inflows to legitimate services, indicating a more substantial decrease in illicit crypto transaction volume.
- Scams Take a Hit: Scams, typically the highest-revenue form of crypto crime, have seen a significant drop in 2023. Crypto scammers have taken in nearly $3.3 billion less than they did in 2022, totaling just over $1 billion for the year. This decline is notable as it occurs during a period of rising crypto asset prices, which usually correlate with higher scam revenue.
- Ransomware is the only form of crypto-based crime expected to grow in 2023, with attackers having extorted $175.8 million more than they did at the same time in 2022. If this trend continues, ransomware attackers could extort $898.6 million from victims in 2023, making it the second-biggest year ever for ransomware.
See: Calgary Police and Chainanalysis Launch the Western Canada Cryptocurrency Investigations Centre
- Big Game Hunting: The resurgence of ransomware is attributed to the return of "big game hunting," where large, deep-pocketed organizations are targeted by ransomware attackers. There has also been an increase in successful small attacks, leading to growth in ransomware payments at both ends of the spectrum.
- Despite the overall decline in crypto crime, the persistent threat of ransomware underscores the need for continued vigilance. Businesses should continue to strengthen their cybersecurity and data backup procedures to protect against this significant threat.
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