Illicit On-Chain Activity Expands Beyond Cybercrime to National Threats: Chainalysis

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With cryptocurrencies becoming more widely accepted, there’s a growing concern about their misuse. It’s not just limited to conventional internet crimes; it now encompasses potential risks such as compromising national security and deceiving consumers, as highlighted by Chainalysis.

It’s true that these unlawful entities are progressively adopting digital platforms within the blockchain for money laundering, despite primarily functioning off the chain. This transition has given rise to a more professionalized on-chain criminal ecosystem, where complex networks and advanced services have arisen to aid diverse types of crypto-related crimes.

Sextortion, KYC Bypasses, and More in 2024

Based on a recent announcement by Chainalysis and reported by CryptoPotato, it was discovered that addresses associated with illegal cryptocurrency transactions received approximately $40.9 billion in 2024. This amount represents a decrease compared to previous years. However, it’s important to note that this figure is an estimate based only on inflows to known illicit addresses identified so far, suggesting that the actual number could be higher.

The blockchain research company anticipates the ultimate sum could be greater, suggesting that the year 2024 might have witnessed record inflows into illegal groups or entities.

Based on historical trends, it’s likely that the volume of illicit cryptocurrency transactions in 2024 will be higher than in 2023. Since 2020, our yearly estimates of illegal activities have increased by around 25% from one reporting period to another. If this trend continues, the total for 2024 could exceed $51 billion.

2024 saw an increase in fraudulent activities, with high-profit investment schemes and pig butchering becoming particularly profitable means of deceit.

Artificial intelligence (AI) is now a crucial element in these strategies, allowing for highly customized extortion attempts via sextortion and assisting the growth of cybercrime in various ways, such as bypassing Know Your Customer (KYC) protocols through AI-enhanced services. Swindlers are also making use of assurance services like Huione and capitalizing on crypto ATM scams, which pose a significant concern because they often target the elderly.

2023 Darknet Market Earnings Fall Short of 2022

In 2024, the amount of money stolen increased by approximately 21% compared to the previous year, reaching around $2.2 billion. Decentralized finance (DeFi) platforms were responsible for the majority of these thefts, but during the second and third quarters, centralized services were more often the target.

Approximately 43.8% of stolen cryptocurrency can be attributed to breaches of private keys. In the past year, North Korean hacking groups have swiped an astounding $1.34 billion from various crypto platforms, making up about 61% of the total annual losses. Some of these attacks are believed to be orchestrated by North Korean IT professionals who have successfully infiltrated both crypto and web3 companies, utilizing sophisticated methods like advanced Tactics, Techniques, and Procedures (TTPs) to compromise their networks.

According to Chainalysis, ransomware earnings are still in the hundreds of millions, but large law enforcement actions and fewer victims paying ransoms have impacted the system. However, this year (2024) has been active with continued attacks and some ransomware gangs receiving smaller payments.

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2025-01-15 16:07