Although crypto-related crime has fallen overall, funds received through ransomware surged by 311% in 2020.
The headlines are often dominated by scary stories of crypto scams and exchange hacks — but a new Chainalysis report has delivered some rare good news: crimes involving digital assets fell significantly in 2020.
According to the blockchain intelligence firm, just 0.34% of crypto transaction volumes last year were linked to criminal activity — the equivalent of about $10 billion. By contrast, 2.1% of all crypto transfers were linked to illegal use in 2019, or approximately $21.4 billion.
Of course, the total market cap of cryptocurrencies — and overall use — increased substantially in 2020, which is why the percentage of criminal transaction volumes fell more sharply than their cash value.
Scams continue to dominate the world of crypto-related crime, representing 54% of all illicit activity, and darknet markets came second. However, Chainalysis added:
“The big story for cryptocurrency-based crime in 2020 is ransomware. That may sound counterintuitive, as ransomware accounted for just 7% of all funds received by criminal addresses at just under $350 million worth of cryptocurrency. But that figure represents a 311% increase over 2019. No other category of cryptocurrency-based crime rose so dramatically in 2020, as COVID-prompted work-from-home measures opened up new vulnerabilities for many organizations.”
Another problem here lies in how ransomware cases are often underreported, with some victims paying up and hoping the issue will go away. Given how several hospitals fell victim to this type of crypto crime in 2020, it’s likely that much closer attention will be paid to this threat in 2021.