Chainalysis reports that a significant number of cryptocurrency whales are criminals and that the dark web trading market is the main source of funding
Chainalysis reports that about 3.7% of cryptocurrency whales are criminals and most of their income appears to come from the dark web, as they have about $25 billion in total assets. However, as law enforcement becomes more efficient, legal cryptocurrency adoption remains ahead of illegal use.
Blockchain analytics firm Chainalysis' crypto crime report in 2022 shows that cybercriminals account for 3.7% of the cryptocurrency whale. The blockchain analytics firm noted that criminal activity has risen in line with the growth of the market over the past year.
Criminals hold more than $25 billion
According to the new Chainalysis report, there are approximately 4,068 criminal-controlled cryptocurrency addresses, representing 3.7 percent of all cryptocurrency whales, through on-chain analysis. These criminals hold about $25 billion in crypto assets, according to the report.
In its report, Chainalysis revealed their process for identifying these criminals. The company noted that only private cryptocurrency addresses holding more than $1 million, with more than 10 percent of their holdings obtained from illegal sources, were placed in this category.
According to the report, 1,361 of these addresses received between 90 and 100 percent of their holdings from known criminal addresses. A breakdown of the sources of funds obtained by criminals shows that dark web trading markets are the main source of illegal funds at 37.7 percent, followed by cryptocurrency scams at 32.4 percent, while stolen funds, fraudulent stores and ransomware attacks make up the rest. Ransomware attacks accounted for only 1.9 percent, the smallest source in the list.
Using data obtained from 768 of these criminals, Chainalysis was able to use time zones to try to make a strong estimate of their vertical location, and the company estimates that the majority of the activity of these 768 criminals is likely to come from countries such as South Africa, Saudi Arabia and Iran.
Chainalysis also noted that while the number of illegal cryptocurrency transactions is still at its highest level, illegal cryptocurrency transactions will only represent 0.15% of total cryptocurrency transactions in 2021. The firm noted that "the share of illegal activity in cryptocurrency trading volume has never been so low." However, the firm acknowledges that the sheer volume of these activities remains a concern and poses a threat to innocent individuals and the cryptocurrency space, as regulation can become unfavorable.
Law enforcement is getting better at dealing with crypto crime
In the report, Chainalysis praised law enforcement's efforts to date and noted that their capabilities are "evolving. The report cites examples from the CFTC and FBI's fight against cryptocurrency criminal activity in 2021 to support this view.
In their report, the Chainalysis attempt to detail how these crypto crimes are being conducted and the new methods that are flourishing. They hope that law enforcement will be able to use these findings to better combat cryptocurrency crime.
It's worth noting that just last week, a couple was arrested in New York on suspicion of money laundering and fraud after the U.S. Department of Justice seized $3.6 billion worth of bitcoin in connection with a 2016 hack.
From：On DarkNet – Dark Web News and Analysis
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