A new report from leading blockchain analytics firm Chainalysis finds that while illicit cryptocurrency activity has declined since the start of the year, inflows into legitimate services are at their highest levels since the last surge in 2021.
The company’s 2024 Cryptocurrency Crime Midterm Report states that “the total amount of illicit activity has decreased by 19.6% year-to-date, from $20.9 billion to $16.7 billion.”
The report found that in addition to the decline in illicit activity, inflows into legitimate services are at their highest since the peak of the previous crypto bull market in 2021, when Bitcoin hit a previous high of over $68,000.
“This encouraging sign indicates that cryptocurrency adoption is continuing globally,” the report added.
Stolen funds and ransomware are on the rise
The report found that overall cryptocurrency crime has declined since the beginning of the year, but two categories of cryptocurrency crime appear to be bucking the trend. The analysis found that stolen funds have nearly doubled from $857 million to $1.58 billion, while ransomware inflows have increased by about 2% since January, from $449.1 million to $459.8 million.
The report also found that the average value of cryptocurrency stolen in each crime incident has increased. “Since January, the average amount of cryptocurrency stolen has increased by approximately 80%, which is largely due to the rise in the Bitcoin price, which accounted for 40% of the total volume involved in these thefts,” the report said.
According to the report, despite the overall decline in illicit activity, 2024 is expected to be the most profitable year to date for ransomware payments. “This is due in no small part to variants that perform lesser-known attacks but collect large payments, known in the industry as ‘big game hunting,’” the report states. Ransomware revenues are expected to top $459.8 million, suggesting that another record-breaking year for ransomware is on the horizon.
Off-chain methods used for illicit activities
Cybercriminals, including North Korean-linked IT workers, are increasingly using off-chain methods to infiltrate cryptocurrency-related services and steal funds, according to Chainalysis research.
“When it comes to stolen funds, North Korea-linked hacking groups are notorious for being behind some of the largest heists. These actors are known to use calculated social engineering tactics to infiltrate cryptocurrency businesses, steal cryptocurrency assets, and leverage specialized money laundering techniques in an attempt to cash out the funds before they can be seized,” the report said.
Chainalysis cites a recent UN report that found thousands of North Koreans involved in cybercrime activities are using sophisticated covert tactics to find jobs at Western technology companies.
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