,

Crypto Crime Drops Significantly in 2023 Despite Rising Token Prices

Crypto bitcoin between handcuffs with downtrend red arrow.

Digital asset prices are up significantly this year. But that isn’t the only good news for those involved in the space: Crypto scammers are making less money, too.

Blockchain data firm Chainalysis said Wednesday that cryptocurrency-related crime has dropped by 65% so far this year compared with 2022. The data was based on digital asset inflows to illicit entities.

The firm defines illicit entities addresses linked to darknet markets or ransomware attackers.

The report said that inflows to “risky entities”—such as high-risk exchanges and mixers—has also dropped by 42%. Criminals often use such services to launder funds.

Chainalysis said that there had been a market pullback across the board but “illicit crypto transaction volume is falling much more than legitimate crypto transaction volume.”

“Scams are nearly always the highest-revenue form of cryptocurrency-based crime, and while that’s the case so far in 2023, total scam revenue has plummeted compared to last year,” the firm said.

It added that crypto scammers have pulled in 77% less revenue than they did through June of 2022. And this is notable, Chainalysis said, because digital asset prices have risen this year—which usually works in criminal groups’ favor.

Bitcoin was in January trading for less than $17,000 per coin; it is today trading hands for $30,500.

The report said: “Usually, positive price movements translate to higher scam revenue, likely because increased market exuberance and FOMO make victims more susceptible to scammers’ pitches. But 2023’s drastic scam decline bucks that long-standing trend.”

But despite the fall in scams, ransomware attacks are growing: attackers are on pace for their second-biggest year ever and have extorted at least $449 million through June.

Source