Crypto Crimes Fall With Price Slump

Quick Take:

• Crypto-linked crimes have reduced in the Year-to-Date (YTD) period.
• The decline in crypto crime revenue is positively correlated with the Bitcoin price slump
• Caution and appropriate safety measures are advised as hackers are still on a rampage despite published data.

There seems to be a profound correlation between the activities of crypto-linked criminals and the price of cryptocurrencies. 

In the mid-year crypto crime update from Chainalysis, it was revealed that the total proceeds from scams thus far this year came in at $1.6 billion, down 65% from the same time period last year.

The chart above shows that proceeds for crimes emanating from digital currencies are at their lowest value for July when compared to the prior 3 years.   . 

This figure is noteworthy considering the biggest hack in the modern Decentralized Finance (DeFi) ecosystem involving the $625 million looted from the Ronin Bridge was carried out this year.

According to Chainalysis, the declining proceeds from scams is arguably in tandem with the price of Bitcoin which has also been plummeting thus far this year.

Per insights from the report, it was obvious that crypto investors or participants in the digital currency ecosystem are hardly falling victim to scams anymore. 

“...fewer people than ever are falling for cryptocurrency scams. One reason for this could be that with asset prices falling, cryptocurrency scams — which typically present themselves as passive crypto investing opportunities with enormous promised returns — are less enticing to potential victims,” the report reads.

Chainalysis also posited that the declining volume in crypto-linked crimes can also be linked to the lower prevalence of inexperienced users, most of whom stay away when the market is unfavorable.

Crypto Crimes: Reduced but Not Absent

The Chainalysis report showing how cybercriminals have struggled this year should not give room for complacency. Hackers are still very active with attacks on protocols being reported on a daily basis.

While the earlier mentioned Ronin Bridge hack by the Lazarus Group as later confirmed by US Authorities is the most publicized, other DeFi platforms like Nomad have also reported costly exploits.

Layer-1 blockchain protocol Solana also saw its wallets attacked recently with about $5 million looted across the board. The frailty in the Solana protocol which has stirred a number of network outages has pushed Jump Crypto to announce it will be building another Validator Client for the blockchain as reported earlier by DecentReviews.