Criminal Activity in Crypto Transactions Fell Sharply in 2020, Says Chainalysis

Partly offsetting the positive trend is an explosion in ransomware attacks, which rose 311% from 2019.

By Tanzeel Akhtar

Jan 19, 2021 at 4:47 p.m. UTC

Updated Sep 14, 2021 at 10:58 a.m. UTC

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Tanzeel Akhtar

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Blockchain investigation firm Chainalysis said cryptocurrency-related crime fell significantly in 2020 but remains appealing for criminals due to its pseudonymous nature.

Chainalysis reports in 2020, cryptocurrency criminal activity fell to 0.34%, or $10.0 billion in transaction volume, compared with 2019, when criminal activity represented 2.1% of all transaction volume or roughly $21.4 billion worth of transfers.
One of the reasons for the decline is due to overall economic activity nearly tripling between 2019 and 2020, but the overall amount of cryptocurrency-related crime is falling and is an even smaller part of the cryptocurrency economy, said the firm.
Chainalysis highlighted scams were much smaller in 2020 compared to the enormous PlusToken Ponzi scheme in 2019, which took in over $2 billion from millions of victims.
The majority of the cryptocurrency-related scams, around 54%, were made up of illicit activity followed by darknet markets which was the second-largest crime category, accounting for $1.7 billion worth of activity, up from $1.3 billion in 2019.
Chainalysis said the “big story” for cryptocurrency-based crime in 2020 is the rise of ransomware which, while only accounting for 7% of all funds received by criminal addresses at just under $350 million worth of cryptocurrency, was up 311% from 2019. The number of ransomware incidents could even be higher due to the low reporting rate, the firm said.
The COVID-19 pandemic has forced more people to work-from-home and in turn this has opened up new vulnerabilities to ransomware attacks for many organizations, said the firm.

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Tanzeel Akhtar

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