Chainalysis Report: Crypto Crime Decreases, But Ransomware Payments Increase

JAKARTA - All-crypto crime has decreased in the first six months of 2023, but the volume of payments to ransomware attackers has soared and has the potential to record the second-largest total annual year in history. This report was submitted by blockchain analytics company Chainalysis on Wednesday, July 12.

The price of cryptocurrencies has slowly risen this year, recovering after a series of bankruptcys by well-known crypto companies in 2022 pushed down token prices and left investors at large losses.

According to Chainalysis, the flow of cryptocurrencies into illegal services identified by Chainalysis - including the darknet market, ransomware, malware, fraud, fraudulent shops, and child abuse material - reached 2.8 billion US dollars (Rp. 42.5 trillion) in the first six months of 2023, down 65% from $8 billion (Rp. 121.5 trillion) in the same period last year.

However, these figures do not include the flow of funds to entities subject to global sanctions. Transactions related to sanctioned entities accounted for 44% of the total crypto crime of US$20.1 billion (Rp305.2 trillion) in 2022, according to Chainalysis in January.

Revenue from fraud has also decreased, which Chainalysis says contradicts a long-standing trend in which people tend to be more vulnerable to fraud as prices rise, due to "market excitement" and "FOMO" (stirrengthening opportunities).

"However, there has been an increase in the number of people falling into fake fraud, in which fraudsters pretend to be law enforcement officers or other authority figures to extort money," Chainalysis said.

Crypto payments to ransomware attackers reached $449.1 million in the first six months of 2023, up $175.8 million from the same period last year, Chainalysis said. If this trend continues, ransomware strikers will list their second best year in history, analysts added.

"The pursuit of large prey - that is, targeting large organizations with sufficient resources by ransomware attackers - appears to be recovering after a period of decline in 2022. At the same time, the number of successful small attacks has also increased," Chainalysis said.

Chainalysis figures likely do not fully reflect the role cryptocurrencies play in all crimes. For example, they do not include when cryptocurrencies become the result of crypto-related crimes, such as when cryptocurrencies are used as payments in drug trafficking.