• According to blockchain intelligence firm Crystal Blockchain, cryptocurrency payments to ransomware hackers only totaled $16 million in 2021, compared to nearly $74 million in 2021.
• Analysis of on-chain activity shows that crypto services with a high money laundering risk score are seeing a drop in popularity, and crypto exchanges and services have been further tightening anti-money laundering policies, effectively scaring away criminal actors.
• Cross-chain bridges remain popular for illicit transactions, with the Bitcoin-to-Ethereum bridge service Ren being popular among hackers.
Cryptocurrency payments to ransomware hackers have surprisingly only totaled $16 million in 2021, according to blockchain intelligence firm Crystal Blockchain, compared to nearly $74 million in 2021. This comes as ransomware attacks have increased since 2021, particularly with the notorious Conti ransomware gang known for terrorizing U.S. hospitals during the COVID-19 pandemic.
In order to gain further insight into this trend, Crystal Blockchain conducted analysis of on-chain activity. The results showed that crypto services with a high money laundering risk score were seeing a drop in popularity, likely due to increased regulation, registration and client expectations. At the same time, crypto exchanges and services have been further tightening anti-money laundering policies, effectively scaring away criminal actors. The volume of funds sent to low-risk exchanges from scams fell by 24% in 2022 compared to 2021, which is a positive sign.
Offline wallets, allowing users to directly control their funds, are becoming increasingly popular among crypto users in general. Cross-chain bridges, however, remain popular for illicit transactions. The Bitcoin-to-Ethereum bridge service Ren, for example, received almost a half of all crypto from sanctioned entities, and is popular among hackers. This can be seen by the FTX thief, who almost drained the entire of the protocol’s liquidity crossing chains.
Nick Smart, Crystal’s director of blockchain intelligence, said that it may be too early to conclude that ransomware attacks are in permanent decline. However, the data shows that increased regulation, registration and client expectations, combined with strengthened anti-money laundering policies, are having a positive effect. It is encouraging to see that crypto users are becoming more aware of the risks associated with money laundering, and are increasingly choosing to control their funds via offline wallets.