The cryptocurrency sector is breathing a sigh of relief as the first half of 2023 shows an encouraging rebound and a significant downturn in crime rates associated with digital currencies. According to the latest Chainalysis report, the inflow of funds to illicit addresses has dropped by 65% compared to the same period in 2022. Likewise, the inflow to risky entities, including mixers and high-risk exchanges, has decreased by 42%.
Pay attention to the reduction in the volume of illegal crypto transactions when comparing the same periods in 2022 (blue line) and 2023 (yellow line).
Scammers have raked in approximately $3.3 billion less in 2023 than in the previous year. However, this positive trend does not apply to all forms of cryptocurrency crime (the red columns on the chart below). There has been a surge in ransomware attacks (the only blue column), with attackers extorting $175.8 million more than they did during the same period in 2022.
Ransomware is a type of malicious software that encrypts a victim's files or systems. The attacker then demands a ransom, usually in the form of cryptocurrency, in exchange for restoring access to the data upon payment.
Ransomware has become the dominant form of cryptocurrency-related crime in 2023, with large and affluent organisations being targeted. Notably, both low-level and sophisticated ransomware strains are more active this year than in 2022.
In summary, while overall crypto crime has seen a decline this year, the sharp rise in ransomware attacks serves as a reminder that businesses must stay on high alert.