The so-called “crypto winter” that the market is experiencing in 2022 has also impacted illicit cryptocurrency trading volumes. According to a report by Chainalysis, these volumes are down 15% so far in 2022 compared to the same period last year. However, legitimate cryptocurrency volumes saw an even bigger pullback of 36%. That is, in general, criminal activity seems to be more resilient in the face of falls in the prices of digital assets.
Crimes with cryptocurrencies
Looking at cryptocurrency crimes in particular, the company noted that some actually increased in 2022, while others decreased. Scams, for example, are down 65%, with total scam revenue so far in 2022 of BRL 8.3 billion. According to the report, this decline appears to be linked to the fall in prices of different currencies, especially Bitcoin.
Source: Chainalysis “Since January 2022, scam revenue has dropped more or less in line with Bitcoin prices,” the company said. Chainalysis added that it wasn’t just revenue that dropped. The cumulative number of individual transfers in scams so far in 2022 is the lowest in the last four years. “These numbers suggest that fewer people than ever before are falling for cryptocurrency scams,” the company said. The company explained that one reason for this could be that with asset prices falling, crypto scams are less attractive to potential victims. On the other hand, the company hypothesized that new users, who are more likely to fall for scams, are less prevalent in the market now that prices are falling.
darknet
Also according to the report, darknet market revenue also dropped in 2022. At present it is 43% lower than it was until July 2021. This is due, according to the company, to almost certainly the closing and sanctioning of Hydra Marketplace in 5 April, which for years was the predominant market for the darknet.
Source: Chainalysis
Hackers and stolen funds
According to Chainalysis, illicit activity is on the rise in 2022 when it comes to hacking attacks. The company pointed out that, as of July 2022, hackers have stolen BRL 9.1 billion worth of cryptocurrencies in attacks, compared to just under BRL 6.2 billion at the same point in 2021.
Source: Chainalysis As the company highlighted, this trend does not look set to reverse anytime soon. That’s because there was a BRL 980 million hack to Nomad and a hack of more than BRL 25 million of several Solana wallets taking place in the first week of August. “Much of this can be attributed to the staggering increase in stolen funds from DeFi protocols, a trend that started in 2021. As we discussed earlier, DeFi protocols are uniquely vulnerable to hacking as their open source code can be studied by cybercriminals looking for exploits,” the company said. Furthermore, much of the value stolen from DeFi protocols can be attributed to North Korean-affiliated hackers such as the Lazarus Group. “We estimate that so far in 2022, groups affiliated with North Korea have stolen approximately $1 billion worth of cryptocurrencies from DeFi protocols.” Read also: Fan Tokens stand out with increases of up to 250% Read also: Manager Fuse Capital launches investment fund focused on web3 Read also: Scammers created deep fake to deceive the unsuspecting, says director of Binance
