Crypto related criminal activities have fell last year to a little fraction of overall trading volume. But on the another side, some targeted hacks boomed as criminals exploited people performing from home within the outbreak.
Last year, illegal activity made up 0.34% of all cryptocurrency transaction volume, consistent with a report from blockchain data firm Chainalysis. That was down from roughly 2% a year earlier.
“We saw a sudden decrease within the share of overall activity related to illegal entities,” Kim Grauer, head of research at Chainalysis, added. “Still, ransomware was far and away the most important category in terms of activity growth and we’re seeing an all time high for dark-web market activity.”
Ransomware is malicious software hackers use to infect a computer, then demand a fee to unlock it. That bounty is usually paid in bitcoin, or other crypto assets.
The category made up just 7% of all cryptocurrency funds received by criminals, but increased by 311% year over year. Chainalysis pointed to more people performing from home as a new vulnerability for firms – and a good chance for criminals.
Dark web markets fell among the 2nd major crime category, accounting for $1.7 Bln worth of cryptocurrency activity – a roughly 30% increase from a year earlier. Also referred to as the dark web, the dark net is a network that uses the web, but requires specific software and authorizations to access.
Criminals have turned to cryptocurrencies like bitcoin for their simple sending online instantly.
Cryptocurrencies are also pseudonymous too. You can see where funds were transferred, making it easy for firms like Chainalysis to trace. But you can’t see who actually transferred them.
Those features have caught the eye of regulators who fear crypto’s potential role money laundering as well as terrorist financing.
President Biden’s Treasury Secretary nominee, Janet Yellen, mentioned the potential for misuse in her hearing earlier this week , which analysts say weighed on bitcoin prices. The U.S. government must “look closely at the way to encourage their use for legitimate activities,” while “curtailing their use for malign and illicit activities,” Yellen added.
Scams still made up over half all crypto-related crimes, but fell significantly year over year.
Chainlysis’ Grauer added that was more awareness of events just like the PlusToken Ponzi scheme, which took over $2 Bln from victims since 2018.
“People learned a little bit following the ‘get-rich-quick’ mentality 2-years ago,” Grauer added. “That may have caused people to wise up onto a number of these really big Ponzi schemes.”
Bitcoin has already began as a mainstream, Wall Street investment in recent months. The world’s leading cryptocurrency topped $40k earlier this January, boosted by interest from institutions and retail investors, who are now able to purchase bitcoin via payment firms like PayPal.
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