2023 has so far been a meager year for crypto scammers, according to a new report from blockchain intelligence firm Chainalysis.
So far in 2023, crypto-related crime, measured as inflows to “known illicit entities,” has fallen 65% compared with the same period last year.
At the same time, the report said inflows to entities deemed as “risky” were down 42%, while inflows to so-called “legitimate services” were down only 28%.
“In other words, there’s been a market pullback, but illicit crypto transaction volume is falling much more than legitimate crypto transaction volume,” Chainalysis wrote.
Most categories of illicit activity down
The report went on to explain that inflows to illicit addresses are down across nearly all categories.
Notably, the category that has seen the largest decline is crypto scams, with scammers taking in $3.3 billion less so far this year than they had done at the same time last year.
In total, the report said crypto scammers have gotten away with around $1 billion in proceeds so far this year.
The report added that this is notable because crypto prices have generally been on the rise this year, while they were falling last year, breaking a previous correlation between higher prices and increased activity among scammers.
The explanation, however, appears to be related to two specific scams, namely the two large-scale scams known as VidiLook and Chia Tai, that have now ceased to operate.
Ransomware on the rise
One category of illicit activity that has seen growth this year, however, is ransomware.
So far this year, ransomware attacks have generated $175.8 million more than at the same time last year, indicating a reversal in a downward trend seen for ransomware attacks last year, the Chainalysis report said.
“[We] can’t discount the role of the Russia-Ukraine War in last year’s ransomware decline, as the conflict likely displaced ransomware operators and diverted them away from financially inspired cyber intrusions,” the report said about the change in the trend for ransomware attacks compared to last year.
In conclusion, Chainalysis noted that 2023 is “off to a good start” in terms of cyber security, and that “crypto crime as a whole is in sharp decline.”
This shows that the efforts of both law enforcement agencies and the crypto sector itself have paid off and prevented hacks that in previous years have been a major issue in crypto, the Chainalysis report said.
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