Illicit Blockchain Activity Down 20% But Stolen Funds, Ransomware Inflows Rise: Chainalysis

Illicit blockchain activity declined by nearly 20% year-to-date, signaling a positive shift for the cryptocurrency sector. However, certain types of cybercrime, such as stolen funds and ransomware inflows, have been on the rise, according to a recent report by Chainalysis .

The mid-year report revealed a surge in the amount of cryptocurrency stolen in various cyber heists, which nearly doubled to $1.58 billion in the first half of 2024. Additionally, ransomware inflows have seen a slight increase, rising by 2% to reach $459.8 million during the same period.

One of the key factors behind the rise in stolen funds is the resurgence of attacks on centralized cryptocurrency exchanges. This marks a shift in focus from decentralized finance (DeFi) platforms, which had been the primary targets in recent years.

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Value of Stolen Per Hack Surges

Although the overall number of hacking incidents has only slightly exceeded that of 2023, the value stolen per attack has surged by nearly 80% in 2024. Chainalysis attributed this spike to rising cryptocurrency prices, which have made these assets even more attractive to hackers.

“The average amount of value compromised per event has increased by 79.46%, rising from $5.9M per event from January to July of 2023 to $10.6M per event thus far in 2024, based on the value of the assets at the time of theft,” the report noted.

📣 Part 1 of our mid-year #cryptocrime update is here! 🔎 Illicit on-chain activity dropped by nearly 20% YTD, but stolen fund activity is surging and ransomware payments are breaking records. Read our blog for a detailed analysis. https://t.co/WRGG91mpFP

— Chainalysis (@chainalysis) August 15, 2024

Ransomware continues to be a significant threat, with 2024 potentially on track to surpass the record $1 billion in ransom payments seen in 2023. The report points out that this year witnessed the largest ransomware payment ever recorded, approximately $75 million, paid to the Dark Angels ransomware group.

Despite efforts by law enforcement to dismantle major ransomware operations such as ALPHV/BlackCat and LockBit, cybercriminals have adapted by migrating to less effective strains or creating new ones. These groups are increasingly targeting larger businesses, further complicating efforts to curb this menace.

Chainalysis cautioned that centralized exchanges remain a major target, not only for theft but also as conduits for laundering stolen assets. The report noted that these platforms have received nearly $100 billion worth of cryptocurrency from known illicit addresses since 2019, revealing a significant gap in global anti-money laundering (AML) efforts.

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30% of Stolen Funds End Up Sanctioned Exchanges

A notable statistic from the report is that nearly 30% of all cryptocurrency from illicit sources eventually ends up at sanctioned services, such as the Russian exchange Garantex.

The peak of this activity was in 2022, when $30 billion in “dirty crypto” interacted with these services, showcasing the persistent challenge of combating crypto-based money laundering.

It is worth noting that July 2024 alone saw hackers steal approximately $266 million through 16 separate breaches, with the attack on Indian crypto exchange WazirX accounting for over $230 million, or 86.4% of the month’s total losses.

Other significant victims included Compound Finance, Li.Fi, Bittensor, and Rho Markets, highlighting the relentless nature of crypto-focused cybercrime.

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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.