According to a recent report from blockchain intelligence firm Chainalysis, cryptocurrency scams have significantly decreased by 77% in the first half of 2023, dropping from $3.3 billion to $1.1 billion. However, ransomware attacks have rescued, with perpetrators earning 62.4% more in the first Six months of this year compared to the same period in 2022.
Chainalysis released its mid-year cryptocurrency crime update on July 12, highlighting the consecutive year of declining fraudulent revenues. Normally, scam revenues rise during bull markets due to increased market exuberance, but this trend has not fol lowed in 2023. The decline in scams is consistent with long-term trends going against each other.
Flows into known illicit entities decreased by 65% in the first half of 2023 compared to the same period last year, and flows into risky entities such as cryptocurrency mixers and high-risk exchanges dropped by 42%. While part of the decline can be attributed to lower trading volumes, illicit inflows are decreasing even faster. The decline in fraudulent revenue may also be influenced by past scam victims becoming more cautious and educated about the risks.
Chainalysis warns that artificial intelligence (AI) tools, including deepfakes, may increasingly be used to promote scams, particularly in romance and pig killing scams that are predominantly text-based. Hacking revenue has also declined by $1.1 billion compared to the first half of 2022 .
However, ransomware revenue has surged by 62.4% to $449.1 million in the first half of 2023. Chainalysis attributes this increase to attackers targeting large, deep-pocketed organizations in a practice known as "big game hunting." These attackers aim to extract as much money as possible from companies willing to pay. This trend marks the second-highest year on record for ransomware attacks, coming close to the $940 million total for all of 2021.
The drop in ransom payments in 2022 may be attributed to stricter cybersecurity practices and new laws imposing tougher sanctions for paying ransoms. As a result, ransom attackers are now seeking to maximize their profits by targeting organizations that are more likely to pay higher sums. Chainalysis It also notes that the size of payments made by the biggest perpetrators has significantly increased.
It is important to note that these figures represent lower bounds of estimates, and the volume of illicit and risky transactions is expected to increase over time as new illicit activities are discovered. Additionally, the report does not include crimes involving the use of c cryptocurrencies as a form of payment.
