Chainalysis Released the First Part of Its 2024 Crypto Crime Report

On Aug. 15, crypto compliance and research firm Chainalysis released the first part of its 2024 crypto crime report.

Crypto crime fell by 40% in 2023, reaching $20.1 billion — the lowest level since 2018, according to a new report by Chainalysis. However, two categories of illicit activity — stolen funds and ransomware — are on the rise. Stolen funds have nearly doubled from $857 million to $1.58 billion, while ransomware inflows have increased by about 2%, from $449.1 million to $459.8 million, it reported before adding that the amount is already 84% higher than the value stolen over the first half of 2023.

The firm's analysis of illicit cryptocurrency activity spans seven years and is based on data from cryptocurrency exchanges, blockchain analysis, and law enforcement. It defines crypto crime as the movement of funds to and from addresses controlled by illicit entities, including exchanges, darknet markets, ransomware attackers, and terrorist groups.

According to the report, the decline in crypto crime can be attributed to several factors, including the bear market, which has caused a decline in overall cryptocurrency activity, and increased efforts by law enforcement and regulators to crack down on crypto crime.

The report also found that stolen funds and ransomware now account for a larger share of illicit cryptocurrency activity than ever before. In 2023, stolen funds and ransomware inflows accounted for 76% of all illicit activity, up from 64% in 2022.

This increase is being driven by a rise in large-scale cryptocurrency thefts, such as the $380 million hack of the cryptocurrency exchange BitMart in December 2023. The stolen funds are typically laundered through a series of cryptocurrency transactions before being cashed out or used to purchase other illicit goods and services.

Meanwhile, ransomware attackers are increasingly targeting large organizations, such as hospitals and schools, which are more likely to pay the ransom demands. In 2023, ransomware attacks on large organizations generated an average of $6.3 million in illicit cryptocurrency inflows, compared to $1.2 million for attacks on smaller organizations.