2024 Crypto Crime Report – How Bad Is It Out There?

Cryptocurrency is a thrilling frontier, filled with potential and promise. But as it grows, so does the shadowy world of crypto crime. 

*gasp*

We’re kidding. Kind of. When it comes to crypto, especially decentralized finance, users are in complete control of their money. That means no safety net. So, if you leave yourself vulnerable, you’re likely going to be robbed.

If you’ve been wondering how bad it’s gotten out there and what’s being done to fight back, you’re in the right place. We will summarize the key findings from the 2024 Crypto Crime Report from Chainalysis. It’s part one, covering the first half of the year. 

We’ll also showcase real-world examples of crypto projects helping authorities recover stolen funds and offer tips on protecting yourself in this space.

Why Is There a 2024 Crypto Crime Report?

Crime happens every day. All over the world. In every country. In every city. It’s there.

However, someone being mugged in New York isn’t that exciting for media publications to report on, is it? New Yorkers are desensitized to this kind of information. Who hasn’t been mugged in NYC? How is this news?

Crypto crime news gets ratings. Pure and simple. That’s the jist of it. But we don’t want to understate that it’s a problem either. Because it is. And as a new crypto user, you need to make adjustments to protect the funds you worked hard to earn.

Cryptocurrencies have revolutionized the way we think about money and transactions. The 2024 Chainalysis Crypto Crime Report sheds light on the current state of illicit activities in the crypto world. Let’s take a closer look at these findings, highlight efforts to combat crypto crime, and provide practical tips to keep your digital assets safe.

The Rising Tide of Crypto Crime

According to the 2024 crypto crime report from Chainalysis, aggregate illicit activity on the blockchain has dropped by almost 20% year-to-date. This suggests that legitimate activities are growing faster than illegal ones. That doesn’t mean we can lower our guard just yet, though.

Stolen Funds on the Rise

One of the most alarming trends is the rise in stolen funds. The report reveals that stolen funds inflows nearly doubled from $857 million to $1.58 billion. 

The increase is partly due to the rising bitcoin price, making each heist more lucrative. Having a Bitcoin stolen when it’s worth $20k sucks. Losing 5 Bitcoin worth $70k… we don’t want to think about it. 

It’s also worth noting that centralized exchanges, rather than DeFi protocols, are increasingly becoming the targets.

Crypto Crime News – Ransomware Attacks Skyrocket

One of the lesser-discussed facets of crypto crime news is Ransomware. Ransomware is another area that is seeing significant growth. Inflows from ransomware rose approximately 2%, from $449.1 million to $459.8 million. 

The median ransom payment to the most severe ransomware strains has ballooned from just under $200,000 in early 2023 to $1.5 million in mid-June 2024. This shift indicates a focus on targeting larger businesses and critical infrastructure.

What the Heck Is Ransomware?

We’re glad you asked!

Man..it’s kind of depressing to say that.

Ransomware is a type of software that encrypts files on your computer or network, disabling access to them until a ransom is paid. 

These attacks can devastate individuals and organizations, often resulting in losing sensitive data and disrupting critical operations. In this case, someone’s crypto funds that could be for retirement, saving for a new house, or sending the kiddos to a decent college. 

Crypto Industry Fighting Back

It’s not like the crypto industry is taking this lying down. Quite the opposite. Whenever these companies can help, they do. Here’s a story of how Tether recently helped the FBI.

Tether was aiding the FBI in recovering millions in a “pig butchering” scam. In this scam, criminals build trust with victims through fake romantic relationships and lure them into bogus crypto investments. 

Once the funds are moved through various wallets, they become hard to trace. However, with Tether’s help, the FBI managed to seize nearly $5 million, showcasing the importance of cooperation between crypto projects and law enforcement.

As far as crypto crime news, you won’t hear stories like this very often. It’s less sensationalized than reading about a hack leading to $100 million in losses. But you’ll find it if you look hard enough and hone your Google-fu skills. 

Impact on the Crypto Ecosystem

Crypto crime and crypto crime news significantly impact the public perception of cryptocurrencies. 

For many potential users, the threat of theft and scams is enough to deter them from entering the space. This reluctance slows the adoption rate and hinders the growth of the crypto ecosystem.

The crypto industry plays a crucial role in creating safer environments. Believe it or not, Chainalysis and its 2024 crypto crime report help. By fostering a culture of vigilance and education, they can help minimize risks. Initiatives like user education programs and robust security measures are vital in this fight against crypto crime.

Be Proactive: Protect Yourself From Crypto Crime

There are several steps individuals can take to protect themselves:

• Use Reputable Exchanges: Stick to well-known and regulated exchanges, such as Coinbase, Binance, and Kraken.
• Enable Two-Factor Authentication (2FA): Add an extra layer of security to your accounts.
• Stay Informed: Regularly update yourself on the latest scams and security practices.
• Do Not Use Public WiFi: Never connect your phone to public WiFi for a crypto trade. MetaMask is notoriously easy for hackers to break into.
• Use a Cold Wallet: Ledger and Trezor are encrypted cold storage wallets. They’re nearly impenetrable from a hacking perspective. 
• Emails and Communities: Many scammers will try to email you, claiming to be a rep from an exchange. Contact the exchange directly to see if the communication is legit. For communities on Discord and Telegram, members of the teams will never DM you first. Contact the team if an impersonator messages you.
• Do Not Hand Out Information: Scammers can do very little until they get your information. That information can be your seed phrase or connecting your unprotected hot wallet to a scam site.

Learning From the 2024 Crypto Crime Report

The 2024 Chainalysis Crypto Crime Report highlights the alarming uptick in specific crypto crimes and the promising decline in overall illicit activities. 

Despite the challenges posed by crypto crime news, like rising stolen funds and sophisticated ransomware attacks, industry stakeholders’ dedication to establishing a safer crypto environment is commendable. 

Collaborative efforts, such as those demonstrated by Tether and the FBI, underscore the potential of united action in combating crypto crimes. By staying informed and taking proactive measures to secure digital assets, individuals can contribute to a safer crypto ecosystem. 

Ultimately, fostering a culture of awareness and responsibility is essential to mitigate risks and confidently embrace cryptocurrencies’ transformative potential.