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Chainalysis’ 2024 report reveals a complex crypto crime landscape. Overall, illicit activity is down 19.6%, but hacking and ransomware attacks are on the rise.
Chainalysis’ mid-year update reports a 19.6% drop in crypto illicit activity, from $20.9B to $16.7B as of July 2024. This indicates a significant decrease in crypto crime.
This decline is attributed to faster growth in legitimate crypto activity, spurred by positive industry developments such as the adoption of spot Bitcoin and Ether exchange-traded funds (ETFs) in the United States.
However, the report warns of significant increases in two notable areas of illicit activity: stolen funds and ransomware attacks.
1/4 The Mid-Year Crypto Crime Report Pt 1 on #ransomware and #stolenfunds is our pulse check on crime and indicator of what lies ahead. Unfortunately, the outlook isn’t so rosy.
Some cautionary highlights in thread 🧵 https://t.co/mfu9OiB8ro
— J. Burns Koven (@JBurnsKoven) August 15, 2024
After experiencing a 50% drop in 2023, cryptocurrency hacking activity dramatically resurgences in 2024.
The cumulative value of crypto stolen through July has surpassed $1.58 billion, an 84% increase compared to the same period in 2023.
The report notes that while the number of hacking incidents has only marginally increased (2.8% year-over-year), the average value compromised per hack has surged by 79.5%, rising from $5.9 million per event in 2023 to $10.6 million in 2024.
Centralized Exchanges Are Key Targets for Cyber Attack
After four years of focusing on decentralized platforms, crypto thieves are once again targeting centralized exchanges (CEXs).
A prime example is the May 2024 hack of Japanese cryptocurrency exchange DMM, where a staggering $305 million worth of Bitcoin was stolen due to a security breach involving a compromised private key.
This single incident accounted for approximately 19% of the total value stolen in cryptocurrency hacks in 2024.
Similarly, cryptocurrency-related ransomware attacks have also intensified in 2024. In July, Chainalysis identified a $75 million crypto payment to a ransomware group known as Dark Angels, marking the largest single ransomware payment ever recorded.
We can confirm that early this year we saw the largest ransomware payment ever at $75M. The "big game hunting" trend we discussed in our 2024 crime report – fewer attacks on larger targets with deeper pockets – is becoming more pronounced. https://t.co/Z0yvg3Zvp2 pic.twitter.com/4FsivojtA5
— Chainalysis (@chainalysis) July 30, 2024
This represents a 96% year-over-year increase in maximum payment size from 2023 and a staggering 335% increase from 2022.
Notably, the Chainalysis report follows one of 2024’s largest hacks. A July breach at Indian crypto exchange WazirX drained $235 million, which represents almost half of the exchange’s total assets.
