Illegal Crypto Activity Falls 20% Despite Ransomware Growth
The first half of 2024 has seen a notable reduction in illegal cryptocurrency activity, despite a rise in specific cybercrimes according to blockchain analytics.
In the first six months of 2024, illicit transactions totaled $16.7 billion, down from $20.9 billion during the same period last year. Blockchain analytics firm Chainalysis attributes this plunge to the growing pace of legitimate crypto activities. “So far this year, inflows to legitimate services are the highest they’ve been since 2021, the previous bull market peak. This encouraging sign points to the continued adoption of crypto globally,” the company’s analysts noted.
Rising Cybercrime in a Maturing Industry
While general crypto-related crime fell by almost 12%, other aspects within this subcategory of crime are ever growing. Theft of funds rose by almost twofold to $1.58 billion from $857 million a year earlier. Ransomware’s average payment also rose only slightly to $459.8 million from $449.1 million in H1 2023.
Chainalysis warned that 2024 could prove to be the worst year ever on record for ransomware attacks, that can easily outstrip the $1 billion that was paid in ransoms last year. The report showed that there has been a humongous increase in the maximum ransom payments. The biggest single payment this year, so far, goes up to $75 million. This was paid to a ransomware group known as Dark Angels, up 96 percent from last year and a massive 335 percent rise from 2022.
“If the rapidly increasing maximum payment amount were not bad enough, it is doubly discouraging that this trend in the outlier value for each year is actually mirrored by a growing trend in the median payment. This trend is especially common among the most-damaging ransomware events,” Chainalysis analysts added.
Shifts in Targeted Attacks
According to the report, hacking activity has picked up this year, and cybercriminals are turning more towards centralized exchanges. This differs from past years, where decentralized finance protocols were mostly attacked.
“This year has seen a resurgence of hacking activity. Comparing both amounts stolen and the number of hacking incidents year-on-year is telling,” said Chainalysis.
Part of this value increase in the stolen cryptocurrency has to do with the rise in the price of Bitcoin, which made up around 40% of the transaction volume associated with these thefts. Bitcoin, the largest cryptocurrency by market capitalization, reached a record high of nearly $74,000 in March before falling back to about $59,200 as of Saturday, according to data from CoinMarketCap.
The more mature the industry of cryptocurrencies is, the more delicate the balance between its legitimate uses and cybercrime becomes. On the one hand, the general decline of illicit transactions is a good indicator. On the other hand, the enhanced sophistication and frequency of cyber-attacks demonstrates that both robust security measures and proper regulation in the sector are still very much needed.
Final Thoughts
To this extent, the events seem to be critical, the cryptocurrency industry is at a critical juncture where legitimate, mainstream growth looks set to eclipse an illicit one, marking a maturing market. The continued upsurge of targeted cybercrimes, such as malware and hacking, is hitting levels that are now calling on the industry into measures requiring resilience and modernization of security features. There is a similar need to ensure that the industry matures to hit the promises of the cryptocurrencies without being scuttled by the presence of bad actors.
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