The year 2023 has seen a disappointing performance for crypto scammers, according to a recent report by blockchain intelligence firm Chainalysis. The report reveals a 65% decrease in inflows to “known illicit entities” compared to the same period last year. Additionally, inflows to “risky” entities have also dropped by 42%, while inflows to “legitimate services” have only fallen by 28%. These figures indicate that the decline in illicit crypto transaction volumes outweighs that of legitimate transactions.
Interestingly, the report highlights that inflows to illicit addresses have declined across almost all categories. Notably, crypto scams have experienced the most significant decline, with scammers obtaining $3.3 billion less in proceeds compared to the previous year. Despite the generally rising prices of cryptocurrencies in 2023, scammers have managed to pocket approximately $1 billion so far. This break from the previous correlation between higher prices and increased scamming activity can be attributed to the cessation of two major scams, VidiLook and Chia Tai, which were operational in the previous year.
While overall crypto-related crime has decreased, one category that has seen growth is ransomware attacks. The Chainanalysis report reveals that ransomware attacks have generated $175.8 million more in 2023 compared to the same period last year. This marks a reversal from the downward trend observed in the previous year.
The report suggests that the decline in ransomware attacks last year may have been influenced by the Russia-Ukraine War. The war potentially displaced ransomware operators and diverted their attention away from financially motivated cyber intrusions. However, the current increase in ransomware attacks indicates a shift in focus back to this form of cybercrime.
Despite the rise in ransomware attacks, the overall picture of cyber security in 2023 appears positive. The Chainalysis report concludes that the year has started well, with a significant decline in crypto crime. This decrease is attributed to the collective efforts of law enforcement agencies and the crypto sector itself in preventing major hacking incidents, which have plagued the industry in previous years.
The success of these collaborative efforts is significant, as they have contributed to the creation of a safer environment for crypto users. The report highlights the potential for continued improvement in cyber security measures and emphasizes the importance of ongoing cooperation between industry players and legal authorities.
The Chainalysis report paints a positive picture of the crypto landscape in 2023. The significant decrease in crypto scams compared to the previous year signifies progress in deterring illicit activities. Although ransomware attacks have shown an increase, this can be seen as a temporary reversal in the downward trend observed in the previous year. Overall, the report underscores the effectiveness of collaborative efforts in combating crypto-related crime and highlights the potential for further improvements in cyber security measures.