As of December 31, 2021, there was a considerable increase in all types of crimes related to crypto assets, with the greatest increase in the theft of funds and the black market of the “darknet”, according to the recent report issued by Chainalysis according to criminal balances from 2017 to 2021.
Figure 1. Criminal balances at the end of the 2017-2021 year.
Source: Chainalysis Crypto Crime Report 2022.
It is indicated that, at the end of 2021, criminals kept $11 billion compared to the $3 billion reported at the end of 2020.
One of the recommendations indicates that, at the time there are movements, the authorities should accelerate investigations related to cryptoactives since they guide successful tracking within the blockchain. A successful case occurred in February 2022 when the United States Department of Justice seized $3.6 billion in bitcoin, which was stolen from Bitfinex in 2016. Which suggests that cybercriminals keep your funds for a long period of time and hence the importance of acting immediately when there is a fluctuation.
Figure 2. Average holding time of crypto assets for criminal addresses | 2021 vs historical
Source: Chainalysis Crypto Crime Report 2022.
Cybercriminals have been pressured to keep stolen funds for a shorter time due to pressure from public authorities against ransomware authors. Darknet black market providers and administrators tend to hold their funds for a longer period of time before liquidating them as these funds are more difficult for authorities to trace.
Criminal whales are private digital wallets that have crypto assets valued at more than 1 million dollars and must also have more than 10% of their funds from illicit addresses.
Crime whale balances are calculated a bit differently than the overall crime balances we talked about earlier. Because whale crime balances are calculated based on private wallet holdings, and overall crime balances are calculated based on holdings of addresses labeled as illicit (meaning they can include funds held in services, as well as private wallets ), Chainalysis identified 4,068 criminal whales holding more than $25 billion in crypto assets, representing 3.7% of all crypto whales, i.e. private wallets containing more than $1 million in crypto assets.
Figure 3. Source of illicit funds received by criminal whales
Source: Chainalysis Crypto Crime Report 2022.
In this graph we can see the most important crimes that are ahead within the network:
The black markets of the darknet
the scams
the stolen funds
Regarding the analysis of time zones, it was possible to determine the location of the criminal whales, resulting in the country of Russia with an important role in the crimes committed related to cryptoactives, however, there is also a presence of criminal whales in South Africa , Saudi Arabia and Iran.
The difference between crimes committed with fiat and crypto assets is the ability of authorities to efficiently track criminal whales and quantify the number of assets they have in their possession. In crimes committed with fiat, it is more difficult to prosecute criminals because they have shady networks in foreign banks and shell companies that make it difficult to quantify holdings. As for crypto assets, the transactions carried out on the blockchain are usually public, which makes it easy for government agencies in each region of the world to apply successful seizures of said assets, bringing cybercriminals to justice.
Disclaimer: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
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