The 2021 crypto bull market made criminals much richer


By the end of 2021, cybercriminals had linked more than $11 billion in cryptocurrency to illegal activities, a rapid increase from the $3 billion they had at the end of 2020, according to a report by blockchain data firm Chainalysis. The most lucrative crime was theft — 93 percent of the money in criminals’ crypto wallets consisted of stolen coins worth $9.8 billion, according to the company.

To find these numbers, Chainalysis looked at how much crypto was in wallets “attributed to illegal actors.” This means wallets that receive money from things like darknet markets, ransomware operations, scams or crypto theft.

The value of the crypto owned by criminals at the end of the year, broken down by the type of illegal activity the money is linked to.
Chart: Chain Analysis

While cybercriminals gained crypto from their illicit activities, the coins they already owned also became more valuable thanks to the 2021 bull market. While it has fallen in the past month or so, the value of popular coins has soared from late 2020 to late 2021, according to data from Yahoo Finance:

  • Bitcoin: ended 2020 at just over $29,000, ended 2021 at around $47,000
  • Ethereum: 2020 ended around $737, 2021 ended around $3,700
  • Monero: ended 2020 at around $156, ended 2021 at $250

In other words, most crypto criminals who had it in early 2021 would have appreciated in value by the end of the year, if they had kept it.

That said, the report notes that they seemed motivated to liquidate their ill-gotten money much faster in 2021 than in previous years. 75% less time on average.

Ransomware operators were the fastest to get rid of them, holding an average of 65 days of money in 2021, compared to the average of 468 days. Even darknet market operators, whose previous average was 1,252 days long haul, only held funds for just over 250 days (although that’s still plenty of time for those coins to soar in value). Fraudsters and scammers fell somewhere in between, with an average of over 100 days of money left in 2021.

As Chainalysis points out, these funds aren’t necessarily safe in criminals’ wallets, as law enforcement agencies haven’t been sitting still – they’ve accessed those wallets and seized the crypto in them. Throughout 2021, we saw law enforcement taking money allegedly linked to ransomware groups or promoters of Ponzi schemes. And just two months into 2022, we’ve seen even more activity; UK tax authorities have filed for some NFTs, and the US Department of Justice got hold of $3.6 billion worth of Bitcoin stolen during the Bitfinex hack — we’ll likely see that kind of dent reflected in next year’s numbers, which also happens with the price of cryptocurrencies.

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