While the ransomware market is rising and cybercriminals continue to rack up bitcoin payments, illicit cryptocurrency activity is declining, according to new research from Chainalysis.
Funds sent to illicit cryptocurrency addresses dropped from $39.6 billion in 2022 to $24.2 billion in 2023.
In addition to the total value sent to illicit addresses, the estimated percentage of cryptocurrency transaction volume connected to illicit activity also decreased from 0.42% to 0.34% in 2023.
Chainalysis attributed the decreases to a drop in cryptocurrency scamming and hacking, which might signify improved security, especially for decentralized finance protocols.
In 2022, Chainalysis found cryptocurrency crime had reached an all-time high with a rise in the DeFi industry as a main contributor.
In terms of large hacks or thefts, Chainalysis referred to the notorious cryptocurrency exchange and hedge fund FTX Trading Ltd., which shut down in November 2022.
Chainalysis initially held off on including the $8.7 billion in credit claims against FTX as part of its 2023 report.
Following the conviction of founder and former CEO Sam Bankman-Fried on several fraud charges last year, Chainalysis added FTX funds to 2022's total, which helped push the previously published figure from $20.6 billion to $39.6 billion.
Eric Jardine, cybercrime research lead at Chainalysis, told TechTarget Editorial that there are many DeFi security challenges, including basic human error and fraud.
DeFi protocols also require more auditing of smart contracts, he said, compared to other areas of the cryptocurrency economy.
Though Chainalysis tracked an upward trend for DeFi in 2023, it could swing the other way depending on security mindsets.
While the introduction addresses broader cryptocurrency crime trends, Jardine said the data showcases ongoing improvements for on-chain attribution.
More coverage of on-chain activity means Chainalysis can make more refined estimates.
Chainalysis's report documented promising changes in the cryptocurrency crime ecosystem, but the vendor also found alarming trends.
In 2022, OFAC sanctioned Tornado Cash, a cryptocurrency mixer that let threat actors obfuscate illicit funds, as well as the Russian virtual currency exchange Garantex.
Suex, a Russian cryptocurrency broker known for laundering ransomware payments, was also sanctioned in 2021.
Chainalysis said that doesn't mean Garantex's total transaction volume is associated with ransomware and money laundering alone.
The report also noted a rise in total ransomware revenue despite a decline Chainalysis observed in 2022 when payments dropped from $766 million to $457 million.
The number of ransomware attacks continued to skyrocket throughout 2023.
Arielle Waldman is a Boston-based reporter covering enterprise security news.
This Cyber News was published on www.techtarget.com. Publication date: Thu, 18 Jan 2024 16:43:04 +0000