- Cryptocurrency scams have seen a significant decline of 77% in the first half of 2023, down from $3.3 billion to $1.1 billion, according to Chainalysis.
- Despite the decline in scams, ransomware attacks have increased, with perpetrators earning 62.4% more revenue compared to the first half of 2022.
- The surge in ransomware revenue is due to attackers “big game hunting,” targeting larger organizations with deep pockets.
A recent report from the blockchain intelligence firm, Chainalysis, revealed that cryptocurrency scams have dramatically decreased by 77% over the first six months of 2023, falling from $3.3 billion to $1.1 billion. This downward trend, the second consecutive year-over-year decrease, seems to contradict historical data suggesting scam revenue generally spikes in bull markets. The report suggested that with increased market exuberance, investors become more susceptible to scammers’ pitches.
However, 2023 has broken this norm with a drastic drop in scam revenue. The trend is even more pronounced with inflows into known illicit entities declining by 65%, and inflows to risky entities, like cryptocurrency mixers and high-risk exchanges, dropping by 42% compared to the same timeframe in 2022. Chainalysis attributes this drop partially to the overall decline in transaction volumes but pointed out that illicit inflows have receded at a faster rate than legitimate services.
Kim Grauer, director of research at Chainalysis, speculated that past victims of scams may be becoming more discerning with their investments. This heightened scrutiny, coupled with increased awareness campaigns and reporting on the risks of scams, could be contributing to the reduction in scam revenue.
Surge in Ransomware: The Return of the ‘Big Game Hunters’
While crypto scams are in decline, another form of crime has resurfaced with alarming momentum—ransomware. The report revealed that ransomware attackers are now pocketing 62.4% more revenue than they did during the first half of 2022. The increase is attributed to attackers “big game hunting,” targeting large-scale, deep-pocketed organizations to extract the highest possible ransom.
These predatory attackers are on track to have their second-biggest year, following 2021’s peak of $940 million. Chainalysis quotes Andrew J. Davis, Risk Officer at Kivu, who speculated that stronger cybersecurity practices and new laws imposing stricter sanctions against paying ransoms caused a temporary lull in 2022. Now, attackers have shifted their strategy, targeting high-value firms willing to pay substantial sums to recover their data.
The Future of Cryptocurrency Crime
While the changing landscape of cryptocurrency crime shows a positive trend in the reduction of scams, the resurgence of ransomware is a stark reminder of the persistent threat in the digital landscape. As artificial intelligence tools become more prevalent, Chainalysis warns of their potential misuse in promoting scams, particularly with the growth of text-based exploits.
Therefore, despite the falling figures, caution is warranted. Government bodies, industry groups, and individual investors must stay vigilant against these evolving threats, enhancing their cybersecurity practices and remaining scrupulous in their digital transactions.
The battle against cryptocurrency crime is far from over, but these changing trends and their underpinning factors can provide valuable insights to better navigate the tumultuous waters of the crypto world. The ability to adapt and react to these shifts will be crucial in minimizing risk and mitigating the impact of future threats.
