Between 2019 and 2020, the volume of money moved in illegal activities fell by 80%. Amid the COVID-19 pandemic, ransomware attacks moved 300% more money than in 2019.

During 2020, there was a considerable decrease in movements of funds in cryptocurrencies linked to illegal activities, compared to the previous year. The latest report from Chainalysis, a research firm that monitors these events, reflects this situation.

Only 0.34% of the volume of transactions with Bitcoin and other cryptocurrencies was connected with crime. This figure represented more than 80% decrease, compared to 2.1% in 2019, according to the report.

The firm estimates that more than USD 21 billion worth of Bitcoin and other cryptocurrencies were involved in illegal activities in 2019. That figure dropped to about USD 10 billion in 2020, considering the total funds that addresses identified with a crime received and sent.

According to the researchers’ initial estimates for 2019, the volume of transactions linked to crime comprised only 1.1% of the total. However, when they found new addresses involved in crime, the final figure grew. For that reason, they predict that there may be an increase regarding the 2020 data in the future.

Despite those estimates, the authors of the report take an encouraging position on crime and cryptocurrencies. They consider the decrease in funds related to crime that moved during the year to be positive.  However, they say that “one of the reasons why the percentage of illegal activities decreased is that general economic activity almost tripled.”

Scams Lead the Movement of Illegal Funds in Bitcoin

In 2019, most of the funds associated with crime were part of scams with Bitcoin or other cryptocurrencies. Chainalysis only considers the funds that addresses linked to criminal activities received, which amount to about USD 5 billion.

Even though scams ranked first among crimes that the use of cryptocurrencies benefited, they fell considerably compared to the previous year. The total volume of money coming from scams had a reduction of more than 70%, according to the report.

The value in Bitcoin and other cryptocurrencies connected with crime decreased largely because the scams were relatively small. In the case of PlusToken, the Chinese authorities confiscated nearly 200,000 stolen bitcoins from this scheme in 2019.

Curiously, that that scams recorded a big increase on darknet markets during 2020, according to the researchers. In the last year, there have been about USD 1.7 billion worth of Bitcoin and other cryptocurrencies associated with dark markets. This represents a slight rebound compared to USD 1.3 billion in 2019.

A Ransomware Boom amid Coronavirus ‘New Normality’

Ransomware attacks in which cybercriminals demand payments in Bitcoin and other cryptocurrencies had the most significant increase. The volume of money that moved grew by more than 300%, compared to 2019.

“No other category of cryptocurrency-based crime increased so dramatically in 2020. Work-from-home measures due to the COVID-19 pandemic opened up new vulnerabilities for many organizations,” according to the research.

The pandemic forced many people to migrate their daily lives, as well as their jobs, companies, and business to the digital sphere. This situation led to the considerable spread of crime linked to digital life, so kidnapping and extortion for digital data gained prominence.

Cyber criminals launder most of the funds associated with this type of activity on large exchanges. The same Chainalysis report states that the trend of money laundering on large platforms continued during 2020. They even believe that money laundering with cryptocurrencies was more centralized.

By Alexander Salazar


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