Crypto ransomware attacks surge in 2023

Blockchain analytics firm Chainalysis released its latest findings on the state of crypto crime in the first six months of this year. The report highlights a decline in overall crypto-related illicit activities, while also revealing a concerning surge in payments made to ransomware attackers.

Following a period of recovery for cryptocurrency prices, which rebounded from the impact of high-profile crypto firm bankruptcies in 2022, Chainalysis observed a decrease in flows to illicit services. These services include darknet markets, ransomware actors, malware operations, scams, and fraud shops. Notably, the total inflow to such entities decreased by 65% compared to the same period last year, amounting to $2.8 billion for H1 2023.

However, Chainalysis’s assessment excludes transactions involving entities subject to global sanctions. Previous data from January indicated that sanctioned entities accounted for a significant portion of the record-breaking $20.1 billion in crypto crime observed in 2022.

Despite the overall decrease in crypto crime, one noteworthy development is the surge in payments directed towards ransomware attackers. Chainalysis reveals that in the first half of 2023, the total value of crypto payments to ransomware criminals reached $449.1 million. This represents a substantial increase of $175.8 million compared to the corresponding period in the previous year. Should this trend continue, ransomware attackers may be on track to achieve their second-highest annual total on record.

Chainalysis’s analysis further highlights the resurgence of “big game hunting” by ransomware attackers, who are increasingly targeting large organisations with significant financial resources. Simultaneously, the number of successful smaller-scale attacks has also grown, indicating a broadening scope of targets.

Although revenue from scams has declined, Chainalysis has identified a rise in impersonation scams. These scams involve fraudsters posing as law enforcement officers or other authority figures to deceive victims and extort money from them.

Chainalysis’s figures may not fully capture the extent of cryptocurrency’s involvement in overall criminal activities. The analysis excludes instances where cryptocurrencies serve as proceeds from non-crypto-related crimes, such as their use in drug trafficking transactions.