Digital currency crime reduced by 83% in 2020, but ransomware attacks up 311%
Digital currency crime reduced drastically in 2020, a new report by blockchain analytics firm Chainalysis has revealed. However, in a shocking twist, ransomware attacks had their biggest year yet, tripling in 2020 as cybercriminals took advantage of a rise in work-from-home lifestyles.
The report revealed that illicit activities only accounted for 0.34% of all digital currency activity, or roughly $10 billion. This was a huge drop from the previous year when it accounted for a worrying 2.1%, or $21.4 billion worth of transfers. Chainalysis believes that the rise in overall economic activity in 2020 was a major factor in the drop.
Scams continued to dominate the illicit activity charts in 2020, accounting for over half of all funds received by criminals. However, there was a 72% drop year-over-year, indicating that increased awareness and government oversight is gradually stamping out fraudsters from the industry.
Darknet markets accounted for the second-largest share, recording a 29% rise.
Chainalysis analysis found that ransomware attacks had their biggest year yet in 2020. Kim Grauer, the head of research at the New York-based firm commented on CNBC:
“We saw a significant decrease in the share of overall activity associated with illicit entities. Still, ransomware was by far the biggest category in terms of activity growth and we’re seeing an all-time high for dark-net market activity.”
This category accounted for $350 million, or just 7% of all the funds criminals received last year. However, this was a 311% rise from the 2019 figures.
“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,” the report noted.
Even more worryingly, Chainalysis indicated that ransomware attacks are grossly underreported. It believes that the figure will likely rise as the company identifies more addresses associated with different malware strains. Beyond the numbers, ransomware is also more destructive as it can cripple companies and governments. With all this in consideration, the company estimates that the total losses from ransomware might be over $20 billion in 2020.
Other categories that received notable amounts of illicit digital currencies included stolen funds, terrorist financing, domestic terrorism and sanctions evasion.
The report comes as Janet Yellen takes over as the U.S. Treasury Secretary. The former chair of the Federal Reserve expressed concerns over the use of digital currencies in illicit activities in her recent nomination hearing. She has, however, pledged to work with other regulators to foster the adoption of digital currencies.
See also: CoinGeek Live presentation, Blockchain Intelligence: Analytics, Forensics & Compliance Tools for Bitcoin SV
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