Cryptocurrency based criminal balances increased in 2021, as per the Chainalysis Crypto Crime Report 2022. The report highlights that by the end of 2021, cyber criminals accounted for $11 billion worth of fraud from illicit sources, when compared to three billion dollars, same time the previous year. In 2021, stolen funds accounted for 93% of all criminal balances at $9.8 billion, followed by darknet market funds at $448 million, scams at $192 million, fraud shops at $66 million, and ransomware at $30 million. Moreover, criminal balances went as low as $6.6 billion in July to as high as $14.8 billion in October.
Insights from the report stated that US Department of Justice (DOJ) seized $2.3 million worth of cryptocurrency from DarkSide ransomware operators that were held responsible for the Colonial Pipeline attack in 2021. Similarly, Internal Revenue Service, Criminal Investigation (IRS-CI) seized over $3.5 billion worth of cryptocurrency during 2021, while London’s Metropolitan Service seized £180 million worth of cryptocurrency from a suspected money launderer for the same year. In February, 2022, the DOJ seized $3.6 billion worth of cryptocurrency which had connections with the 2016 Bitfinex hack.
As per the report’s data, the funds liquidating time for darknet market vendors, administrators and illicit wallets fell by 75% in 2021. Meanwhile, ransomware operators held their funds for an average period of 65 days before liquidating.
The report identified that cyber criminals held one million dollars each or more worth of cryptocurrency, and received 10% of their funds from illicit addresses in 2021. Overall, Chainalysis reported that 4,068 cyber criminals held over $25 billion worth of cryptocurrency. The group represented 3.7% of all cryptocurrency based criminals, or one million dollars worth of cryptocurrency in private wallets. While 1,374 cyber criminals received between 10-25% of their funds from illicit addresses, 1,361 cyber criminals received between 90-100% of their total balance from illicit addresses.
(With insights from the Chainalysis Crypto Crime Report, 2022)