Cryptocurrency Crime Report (2020): Summary of top crypto crimes and why ransomware is the top story?
In 2020, economic turmoil caused by Covid-19 shook the entire world and impacted the financial markets in a major way, whereas for cryptocurrency the year proved to be quite outstanding. Despite the pandemic, by the end of 2020 Bitcoin reached an all-time high with the price surpassing $28,000. The price hike was driven by demand from institutional investors.
However, the digital currency remained attractive to criminal groups primarily because of its pseudonymous nature.
On the brighter side though, in 2020 crimes related to cryptocurrency fell considerably.
In 2019, 2.1% or approximately $21.4 billion worth of cryptocurrency transactions represented criminal activity. In addition to this, the transaction value in 2020 declined to 0.34%, or $10.0 billion.
What is the reason behind the declining criminal activity as a proportion of all cryptocurrency transactions? One reason for such a percentage drop is the overall increase of the economic activities between 2019 and 2020. Moreover, the interest of serious and legitimate investors has increased towards digital currency, which has actually lowered the rate of scams.
Although the crime rate showed a decline in the previous year, illicit activities remained a contributing factor in the crypto economy.
What crypto crimes contributed to the 0.34% share of transactions?
Scams topped the chart as a major crypto-related crime by 54%, representing $2.6% billion of the total worth. Compared to 2019 this number is much smaller, as there was no significant event recorded like the PlusToken scam, which extorted $2 billion from victims. Darknet markets take second place on the chart, the illicit activity increased to $1.7 billion from $1.3 billion in 2019, while the profits surged from ransomware, although that only contributed 7% or $350 million worth of cryptocurrency, it is 311% more than 2019.
Learn more about scams: 5 of the Most Common Scams in Various Investment Platforms
How Ransomware became the top story of crypto crimes in 2020?
One key driver for ransomware is the epochal shift to remote working. That led criminals to exploit the vulnerable infrastructure of enterprises due to Covid-19. The damage done by ransomware is much worse than researchers calculated. Experts believe that unless the personal information is exposed, or triggers a data breach, ransomware incidents are never reported publicly.
Ransomware attacks are underreported, but as more associated addresses will be found from various strains, the number will likely increase. For instance, security researchers Brian Carter and Vitali Kremez discovered 61 bitcoin addresses with wallets worth $150 billion targeted by Ryuk ransomware.
Similarly, the figure of cryptocurrency crime in 2019 was recorded as 1.1%, but as more wallets tied to illicit activity were found, the number rose to 2.2%.
If we look beyond the numbers, ransomware can have a devastating impact, not only on businesses but also on local governments. The attacks rose last year amidst the pandemic that affected many organizations including many US hospitals. Talking about numbers, a total of $20 billion was lost due to the ransomware attack.
Cryptocurrency crime has declined but has not been eliminated. As the price of Bitcoin has surged, criminal activities are expected to rise. Can we protect ourselves from being scammed or attacked? Absolutely yes. Different steps can be taken to avoid scams or criminal attacks, but 100% protection is not guaranteed until you hire a specialist.
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