Crypto Exploit Making a Huge Comeback – 77% Reduction in Scams

According to a recent report by blockchain intelligence firm Chainalysis, cryptocurrency scams have seen a substantial drop of 77% from $3.3 billion to $1.1 billion over the first six months of 2023.

However, ransom attacks have seen a 62.4% increase in revenue compared to the first six months of the previous year.

On July 12, Chainalysis released its Mid Year Crypto Crime report, noting that it is the second consecutive year that scam revenue has trended downwards. This is in contrast to the traditional pattern of scam revenue increasing during a bull market.

Chainalysis observed that inflows into known illicit entities dropped by 65%, while inflows to risky entities, such as cryptocurrency mixers and high-risk exchanges, dropped by 42%.

Kim Grauer, director of research at Chainalysis, told Cointelegraph that the decline in scam revenue may be attributed to victims becoming more cautious with their investments, as well as increased awareness campaigns and media coverage.

The firm also warned that artificial intelligence tools may increasingly be used to promote scams through the use of deepfakes, among other things.

Chainalysis reported that hacks also fell by $1.1 billion from the first six months of 2022.

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Ransom perpetrators are ‘big game hunting’ deep pocketed firms

Despite some improvements, ransomware revenue rose to $449.1 million in the first half of 2023, according to Chainalysis. The reason for this is that attackers are now targeting large-scale organizations with deep pockets, in order to ”squeeze the most money possible” out of them.

This year is on track to be the second-biggest year ever for ransomware, with a total of $940 million in 2021. Chainalysis pointed out that the decrease in 2022 could be due to better cybersecurity practices and new laws that impose more severe penalties for paying ransoms.

The analysis also showed that the payments extracted by the main perpetrators have increased significantly. The United Nations Office on Drugs and Crime reported in October 2021 that ransoms occur every 11 seconds around the world, resulting in $20 billion in damages in 2021 alone. Cybersecurity Ventures predicted in June that ransomware will cause its victims $265 billion in losses annually by 2031.

Chainalysis noted that all figures are a “lower bound estimate” and that illicit and risky transaction volume is likely to increase over time as new illicit activity is discovered. Furthermore, the data does not include crimes in which cryptocurrency is used as a form of payment.

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