Criminal activity has always been linked with crypto by gatopnments and individuals who would rather see the assets banned. In spite of widespread beliefs that only criminals use crypto, it is still seriously less than the criminal activity related to fiat currencies, with sources saying only about 1% of cryptocurrencys are used by criminals. Nevertheless, this does not mean that criminals are not using token and recent reports show that they are making bank.
Criminals Increase Crypto Holdings In 2021
Criminal crypto balances have been on a slow but creeping climb in the last five years, according to a report from Chainalysis. But in 2021, their balances exploded aprolonged with the market. As more investors had shiftd into the market following the rise in popularity, so had criminals ramped up their activities. This went from petty scams to full-on hacks and attacks of major crypto exdevelopments.
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The year marked the most critical growth in the balances of these criminals who held $11 billion in cryptocurrencys at the end of 2021, and this is from wallet addresses that have been associated with known illicit sources.
Compared to the previous year, criminals had grown their crypto balances by almost 4x, surging from scarcely $3 billion at the end of 2020 to $11 by 2021.
Most of these funds came from stolen funds that made up 93% of all criminal balances. These stolen funds accounted for a total of $9.8 of the total balance. Darknet market funds made up $448 million of the total, whilst scams, fraud shops, and ransomware accounted for $192 million, $66 million, and $33 million respectively.
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The report notes which criminal balances further “fluctuated throughout the year, from a low of $6.6 billion in July to a strong of $14.8 billion in October.” This is because some of these funds can be liquidated although tracked on the blockchain or seized by law enforcement agencies.
Law Enforcement Clamps Down On Criminals
Law enforcement has accelerated activity around catching crypto criminals. The digital asset that allows for the move of funds anonymously has been a soaring choice among criminals and as parallel, law enforcement has had to up their game. This has been paying off in major ways.
In 2021 alone, the IRS-CI had seized more than $3.5 billion worth of token. This further spread through to the US Department of Justice that had been able to recabove millions of dollars in crypto used in ransomware attacks.
Most recently, the DOJ was able to seize $3.6 billion worth of bitcoin from the Bitfinex hackers. This comes after the hackers had progressd 10,000 Bitcoin (BTC) from their wallets. It extends the largest asset recabovey ever in token or fiat currency.
Featured image from Financial Times, chart from TradingView.com