Crypt crimes drop sharply in 2020
2020 was a good year for the crypto market, especially the second half of the year, despite the pandemic. Bitcoin and other digital assets bounced back from the spectacular drop on Black Thursday to set new records and usher in a new era of institutional investments in the crypto market.
Between the March 12 crash of $ 4,860 and the current $ 41,941 ATH, bitcoin registered over 800% in earnings according to data from CoinMarketCap. But despite continuing with this impressive performance in 2021, the crypto market has remained attractive to criminals mainly due to its support for anonymous borderless transactions.
However, a new report from leading chain analysis platform Chainalysis shows that compared to 2019, crypto-related criminal activity dropped significantly in 2020, partly due to the transparent and traceable nature of cryptographic transactions.
Chainalysis statistics compare the total value of transactions with crypto sent and received by criminal entities in relation to the criminal share of all cryptographic activities from 2017 to 2020. Data show that in 2019, 2.1% of the total volume of crypt transactions US $ 2.1 billion were linked to criminal activities. In 2020, the value dropped to $ 10 billion, representing 0.34% of the total volume of cryptographic transactions.
“One of the reasons why the percentage of criminal activity has fallen is because general economic activity has almost tripled between 2019 and 2020.”
Major Crimes with crypts in 2020
Crypto scams like the infamous PlusToken Ponzi scam accounted for 54% of $ 2.4 billion worth of crypto-related crimes in 2019. However, in 2020, these crypto scams significantly reduced and were replaced by darknet markets that increased from $ 1.3 billion to $ 1.7 billion in 2019 ransomware attacks on individuals and organizations overshadowed the market.
“The big story of cryptocurrency-based crime in 2020 is ransomware.”
Chainalysis said that ransomware crimes increased by 311% compared to 2019, despite representing only 7% ($ 350 million) of all funds received from addresses linked to criminal activities. In 2020 alone, ZyCrypto reported more than 10 occurrences of collective ransomware victims worldwide.
“No other category of cryptocurrency-based crime has increased so dramatically in 2020, when the work spurred by COVID on homemade measures has opened up new vulnerabilities for many organizations.”
The data also indicates that the number may be higher due to the underreporting of some of the targeted victims and the numbers may increase, especially after more addresses are identified from ongoing investigations of new and suspect addresses in the last months of 2020.
The report concludes that ransomware attacks are the most destructive type of cryptographic crime due to their economic impact and the ability to disrupt essential sectors and services, risking private or confidential information.
“When we consider the total economic losses not just from payments, but from companies and governments that went offline in attacks, some experts estimate that ransomware cost $ 20 billion in economic losses in 2020.”